History of the use of the term "tax protester"

[Famspear]

The following is adapted from material in Wikipedia (caveat lector), most of which I wrote myself:

In the United States, the term “protest” as applied to a tax generally means “a declaration by a payer, esp. of a tax, that he does not concede the legality of a claim he is paying.” Webster’s New World Dictionary of the American Language, p. 1142 (World Publishing Company, 2d Coll. Ed. 1970).

Similarly, Black’s Law Dictionary has defined a tax protest as:

The formal statement, usually in writing, made by a person who is called upon by public authority to pay a sum of money, in which he declares that he does not concede the legality or justice of the claim or his duty to pay it, or that he disputes the amount demanded; the object being to save his right to recover or reclaim the amount, which right would be lost by his acquiescence. Thus, taxes may be paid under "protest.”

--Black’s Law Dictionary, p. 1101 (5th Ed. 1979) (bolding added).

In the case of U.S. Federal taxes, however, the taxpayer's failure to protest does not deprive the taxpayer of the right to file an administrative claim with the Internal Revenue Service (IRS) for a refund and, if the claim is not allowed by the IRS, to sue for a tax refund in Federal district court. See generally 28 USC 1346(a)(1); 26 USC 6532(a); and 26 USC 7422.

Protest after tax return examination

The term "protest" is also used to describe a taxpayer's formal written request for review, by the Appeals Division of the IRS, after the IRS issues a "Thirty-Day Letter" proposing an increased tax liability following an IRS examination of a tax return. Donald C. Alexander & Brian S. Gleicher, "IRS Procedures: Examination and Appeals," p. A-46 & A-47, Tax Management Portfolios, Vol. 623, Tax Management, Inc., a subsid. of The Bureau of National Affairs, Inc. (2d ed. 2004).

War protesters

In 1972, the U.S. District Court for the Eastern District of Pennsylvania used the term tax "protestor" (protester) in United States v. Malinowski. This case, however, involved a taxpayer who was a member of the Philadelphia War Tax Resistance League who was protesting the use of tax money in the Vietnam War. The taxpayer was not making arguments that the tax law itself was invalid; he was essentially protesting the war, not the tax. The taxpayer had filed a false Form W-4, and admitted he knew that he was not legally entitled to claim the exemptions (allowances) he claimed on the W-4. He was convicted, and his motion for a new trial or acquittal was denied. See generally United States v. Malinowski, 347 F. Supp. 347, 73-1 U.S. Tax Cas. (CCH) paragr. 9355 (E.D. Pa. 1972), aff'd, 472 F.2d 850, 73-1 U.S. Tax Cas. (CCH) paragr. 9199 (3d Cir. 1973), cert. denied, 411 U.S. 970 (1973).

Frivolous arguments that the U.S. Federal income tax is unconstitutional, otherwise invalid, or improperly applied

Beginning (apparently) in the mid-1970s, U.S. Federal courts began using the term “tax protester” in still another, more narrow sense -- to describe persons who raised frivolous (or at least quasi-frivolous) arguments about the legality of Federal income taxes. The first two federal cases to use the term in this manner appear to be Gilbert v. Miriami, 75-2 U.S. Tax Cas. (CCH) paragr. 9603 (N.D. Ill. 1975), and United States v. Scott, 521 F.2d 1188 (9th Cir. 1975), coincidentally decided only two days apart.

In Gilbert v. Miriami, the taxpayer (Walter Gilbert) sued the District Director of Internal Revenue (Charles Miriami) asking for injunctive and declaratory relief from enforcement of the internal revenue laws, including a request for a judgment that the statute prohibiting most suits to restrain the assessment or collection of Federal taxes was unconstitutional. The court rejected the taxpayer's claims.

In Scott, the court noted that an undercover government agent had sworn out an affidavit regarding the agent’s infiltration into a "tax protester" organization. The case itself upheld the conviction of the leader of that organization, who had failed to file tax returns from 1969 to 1972, based on Constitutional arguments against the validity of the income tax.

A few cases were decided prior to the mid-1970s which, in retrospect, might arguably also be considered "tax protester" cases (although the courts did not label the taxpayers as "tax protesters"). In 1948, frustrated that the government had not reduced the tax rates imposed during World War II, Connecticut businesswoman Vivien Kellems refused to withhold payroll taxes for her employees. She did not dispute the propriety of the tax at that time, but contested the power of the government to require her to collect taxes on its behalf.

Another early protester who apparently was not formally labeled that way was Arthur J. Porth, who argued that the Sixteenth Amendment to the U.S. Constitution should itself be declared unconstitutional. His theory was that the income taxes under the Internal Revenue Code of 1939 imposed "involuntary servitude" in violation of the Thirteenth Amendment. That argument was ruled to be without merit in Porth v. Brodrick, 214 F.2d 925, 54-2 U.S. Tax Cas. (CCH) paragr. 9552 (10th Cir. 1954). He continued his tax protester activities and was eventually convicted of willful failure to file returns and other tax crimes; see United States v. Porth, 426 F.2d 519, 70-1 U.S. Tax Cas. (CCH) paragr. 9329 (10th Cir.), cert. denied, 400 U.S. 824 (1970).

Over the years, the term "tax protester" in the United States has lost much of its original denotative, non-pejorative sense (per the Black's Law Dictionary quote above) and is usually applied more narrowly (at least in the context of Federal taxes) to persons who raise legally frivolous or otherwise preposterous arguments about the legality or applicability of Federal income tax statutes, regulations, etc., or about the constitutional provisions upon which the statutes, etc., are based.

Prior to the Internal Revenue Service Restructuring and Reform Act of 1998 (the 1998 Act), the Internal Revenue Service at one point defined a tax protester scheme as "any scheme without basis in law or fact for the ostensible purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws be [sic] either interfering with tax administration or attempting to illegally avoid or reduce tax liabilities." See Kline v. Internal Revenue Serv. (In re Kline), 26 Fed. Appx. 849, 851 n.1, 2002-1 U.S. Tax Cas. (CCH) paragr. 50,303 (10th Cir. 2002).

Section 3707 of the 1998 Act now prohibits IRS personnel (but not other government personnel) from designating a taxpayer as an “illegal tax protester” or using any similar designation for a taxpayer.

I am looking for further information on the history of the use of the term "tax protester" (or protestor) in connection with Federal income taxation. I figure this is a good place to ask for help.

[Quixote]

TIGTA audits the IRS annually on its compliance with Section 3707. Some IRS employees seem to have trouble understanding the meaning of "using any similar designation for a taxpayer." This excerpt from the 2004 report suggests that one employee, who is either an RO referring to himself in the third person, or an RO group manager, thinks there is some code word that can be used to refer to the taxpayer as a protester without running afoul of 3707.

RO [revenue officer] THINKING OF CALL [sic] CID [Criminal Investigation Division] TO REPORT THIS TAXPAYER AND HAVE [gender removed] LABLED AS A TAX PROTESTOR (RO [revenue officer] CANNOT THINK OF CORRECT TERM).

[Judge Roy Bean]

...Section 3707 of the 1998 Act now prohibits IRS personnel (but not other government personnel) from designating a taxpayer as an “illegal tax protester” or using any similar designation for a taxpayer.

I am looking for further information on the history of the use of the term "tax protester" (or protestor) in connection with Federal income taxation. I figure this is a good place to ask for help.

If you think the hole big enough to drive a truck through in that alleged "prohibition" is somehow not deliberate, you need a serious infusion of reality.

If you want to know what really keeps some people up at night it's the fear that a notebook computer or hard drive gets stolen with the kind of information that isn't supposed to be kept, let alone gathered.

Perhaps some of the regulars here have lost sight of the fact that today, information is really nothing more than a commodity. It has a price. If it isn't right in front of you the answer is to find the right vendor or broker. Whether what you learn can be introduced as evidence may or may not matter; intelligence has an important place in developing any theory of prosecution.

And if you are really stuck in the cave of the pre-data mining world, let me give you a one word introduction to the world of information brokering: Barter. What you know about someone may be worth sharing to obtain what someone else knows.

[The Observer]

If you think the hole big enough to drive a truck through in that alleged "prohibition" is somehow not deliberate, you need a serious infusion of reality.

Could you show us what that "hole" is?

If you want to know what really keeps some people up at night it's the fear that a notebook computer or hard drive gets stolen with the kind of information that isn't supposed to be kept, let alone gathered.

Silly me - and all this time I thought it might have to do with the fact that IRS employees with laptops actually have all types of taxpayer information on there that has to be safeguarded.

Perhaps some of the regulars here have lost sight of the fact that today, information is really nothing more than a commodity. It has a price. If it isn't right in front of you the answer is to find the right vendor or broker. Whether what you learn can be introduced as evidence may or may not matter; intelligence has an important place in developing any theory of prosecution.

Evidence has an important part as well - without any evidence, convictions aren't secured. Which brings up my previous question on the other thread - have you got any evidence that the IRS is systemically creating/maintaining a list of tax protestors? Or even alleged tax protestors?

[LPC]

have you got any evidence that the IRS is systemically creating/maintaining a list of tax protestors? Or even alleged tax protestors?

The IRS maintains a database of people who file frivolous returns, and uses that database to check to see what kind of returns they file after that. But taxpayers are purged from the database once they have filed correct returns for two years.

UILC: 6702.00-00
Release Date: 2/16/2001

Date: November 15, 2000

Refer Reply to: CC:PA:APJP:B02
WTA-N-118733-00

INTERNAL REVENUE SERVICE NATIONAL OFFICE SERVICE CENTER ADVICE

MEMORANDUM FOR:
ASSOCIATE AREA COUNSEL, SALT LAKE CITY
CC:DB:D:SLC
Attn: Mark H. Howard

CHIEF, EXAMINATION POLICY & PROCEDURE
WAGE & INVESTMENT W:CP:EX:P
Attn: David A. Adams

FROM:
Assistant Chief Counsel (Administrative
Provisions & Judicial
Practice) CC:PA:APJP

SUBJECT:
Frivolous Return Program (RRA 3707 and I.R.C. section 6702)

[1] This Significant Service Center Advice responds to your memorandum dated September 15, 2000. Significant Service Center Advice is not binding on Examination or Appeals and is not a final case determination. This document is not to be cited as precedent.

ISSUE

[2] Whether section 3707 of the Internal Revenue Service Restructuring and Reform Act of 1998 prohibits the maintenance of the Frivolous Return Program database which tracks taxpayers who file returns containing potentially frivolous arguments within the meaning of section 6702.

CONCLUSION

[3] No. Section 3707 of the Internal Revenue Service Restructuring and Reform Act of 1998 does not prohibit the maintenance of the Frivolous Return Program database.

FACTS

[4] The Frivolous Return Program in Examination has the specific assignment of processing assessments of frivolous return penalties pursuant to section 6702. The employees of that unit receive documents from throughout the country which IRS employees believe may qualify as frivolous returns under section 6702. The employees review the documents and make a determination of how to proceed.

[5] When the documents come into the Frivolous Return Program, employees enter initial data into a computerized inventory database. IRM 21.8.1.5.5. (05-08-2000). Initial data includes name, social security number, and tax examiner assigned the case. Later, a tax examiner reviews the documents to see if they qualify as frivolous. If the documents meet the frivolous test, the tax examiner does a compliance check to see if the taxpayer is properly filing returns. If the taxpayer is properly filing returns and is not potentially subject to a frivolous return penalty, then the tax examiner deletes the individual from the database. If the tax examiner leaves the individual in the database because of filing obligations or a potential frivolous return penalty, then the tax examiner fills out a worksheet for use in entering further data in the inventory database. The fields for data input into this database include the following: 1

1. Primary/secondary social security number;

2. Primary/secondary name;

3. IRS received date;

4. Location code indicating state of residence of taxpayer;

5. Zip code;

6. Tax examiner assigned the case;

7. Argument code;

8. Type of document filed;

9. Type of letter sent to the taxpayer;

10. Preparer/promoter name;

11. Preparer/promoter employer identification number;

12. Cross-reference employer identification number of the
taxpayer when they have other filings that use an employer
identification number;

13. Last action date;

14. Closing date;

15. Purge date (The Frivolous Return Program reviews the taxpayer
filings two years after receipt of the original document to
determine if the taxpayers have continued to file documents
that qualify as frivolous returns or have not filed returns
they are required to file.);

16. Remarks (includes items such as years filed, type of exam
opened or closed).

[6] The Frivolous Return Program employees use this database for inventory control and research. The tax examiners and clerical staff update the database using information provided by the taxpayer. The Frivolous Return Program has a standalone database that does not tie into the IRS individual master file. All employees of the Frivolous Program can access this database from the computers on their desks.

[7] The employees of the Frivolous Return Program obtain the information they enter into the inventory database from the administrative file associated with the Form 1040 for the individual taxpayer for each year. This information could be retrieved by ordering the administrative files, but due to the volume of cases this would be extremely inefficient. In addition, it would be essentially impossible to keep track of the trend in filing frivolous returns over a period of time. Without a system of this sort, the IRS would be hampered in its timely identification of frivolous arguments promoted by a particular individual or group. The database assists the IRS in taking the necessary action to effectively inform taxpayers of the frivolous nature of certain positions before they become too widespread.

LAW AND ANALYSIS

[8] As part of the Internal Revenue Service Restructuring and Reform Act of 1998, Congress enacted section 3707, an off-Code provision. Section 3707(a)(1) prohibits the IRS from designating taxpayers as illegal tax protesters or any similar designation. Congress enacted section 3707 because of its concern that taxpayers may be stigmatized by a designation as an "illegal tax protester." S. Rep. No. 174, 105th Cong., 2d Sess. 105 (1998). Under section 3707(a)(2), the IRS is required to remove illegal tax protester designations from its individual master file and disregard any illegal tax protester designation in a place other than the individual master file in the case of any illegal tax protesters designation made on or before July 22, 1998, the date of the enactment of section 3707. Although section 3707 prohibits the IRS from designating taxpayers as illegal tax protesters, it does provide that the IRS may designate any appropriate taxpayer as a nonfiler. However, the nonfiler designation must be removed once the taxpayer has filed income tax returns for two consecutive years and paid all taxes shown on the returns. Section 3707(b).

[9] We conclude from the language of section 3707 and its legislative history that Congress was concerned that innocent taxpayers may have been mislabeled as illegal tax protesters. However, Congress did not intend to limit the IRS's ability to maintain records and to make designations, other than the illegal tax protesters designation, where such designations are appropriate. H.R. Conf. Rep. No. 599, 105th Cong., 2d Sess. 308 (1998).

[10] Section 6702 imposes an immediately assessable penalty of $500 on any individual who files any document which purports to be a return of income tax if (1) the document fails to contain information from which the substantial correctness of the amount of tax shown on the return can be judged or contains information that on its face indicates that the amount of tax shown on the return is substantially incorrect, and (2) such conduct arises from a position taken by the taxpayer on the purported return which is frivolous, or from a desire (which appears on the face of the purported return), to delay or impede the administration of the Federal income tax laws.

[11] Prior to the enactment of section 6702, Congress was concerned with the rapid growth in deliberate defiance of the tax laws by tax protesters and that the IRS had 13,600 protester returns under examination as of June 30, 1981. Congress recognized that many of those protesters were induced to file protester returns through the criminal conduct of others. Congress also recognized that these advisors frequently emphasized the lack of any penalty when sufficient tax had been withheld from wages and encouraged others to play the "audit lottery." Section 6702 was enacted because Congress believed that an immediately assessable penalty on the filing of protester returns would help deter the filing of such returns, and would demonstrate its determination to maintain the integrity of the income tax system. S. Rep. No. 494, 97th Cong., 2d Sess. 277 (1982).

[12] As a result of the enactment of sections 3707 and 6702, the IRS has the tasks of balancing the objectives of section 3707, which prohibits the IRS from designating taxpayers as illegal tax protesters or any similar designation, and section 6702, which assesses a penalty on tax protesters or taxpayers who file frivolous returns. The service center has tried to balance these competing obligations by focusing on the conduct of the taxpayers and specifically identifying those frivolous arguments asserted rather than applying a general label of tax protester. In enacting section 3707, Congress did not indicate that section 6702 should not continue to be enforced or that it was no longer concerned with the effect of the filing of frivolous returns on the integrity of the income tax system. Thus, the IRS still has the obligation of identifying and sanctioning those who file frivolous returns. We do not believe that using an inventory database to meet this obligation violates section 3707 where the IRS maintains this inventory database on an independent computer that does not communicate with or put the illegal tax protester or any similar designation in the IRS computer master file. 2

[13] Please contact Willie E. Armstrong, Jr. at (202) 622-7920 if you have any further questions.

Curtis G. Wilson

By: Judith M. Wall
Chief, Branch 2

cc: Compliance Director,
Wage & Investment W:CP
Attn: Jane Warriner
FOOTNOTES

1 The Frivolous Return Program currently has changes to the database in process and plans to remove categories 8, 9, 13, and 14.

2 In addition to enforcing section 6702, information in the database assists the IRS in enforcing sections 6700 and 6701.

END OF FOOTNOTES

[The Observer]

have you got any evidence that the IRS is systemically creating/maintaining a list of tax protestors? Or even alleged tax protestors?

The IRS maintains a database of people who file frivolous returns, and uses that database to check to see what kind of returns they file after that. But taxpayers are purged from the database once they have filed correct returns for two years.

But that isn't a list of protestors and designated as such. Frivolous returns have only been one of many schemes used by TPs. Also, frivolous return schemes have been used by people other than protestors. Since these schemes cause acutal monetary loss to the US Treasury, the IRS is duty bound to track and intercept such attempts, otherwise they would be lambasted for failing to do so. One only has to remember the criticism the IRS receives for failing to detect phony refund schemes to understand how important it is that such lists exist and are used for the purpose they were created.

[jg]

...Since these schemes cause acutal monetary loss to the US Treasury, the IRS is duty bound to track and intercept such attempts, otherwise they would be lambasted for failing to do so. One only has to remember the criticism the IRS receives for failing to detect phony refund schemes to understand how important it is that such lists exist and are used for the purpose they were created.

Hendrickson still touts the refunds he posts by Lost Horizontals as "proof" his nonsense is correct.

The silence has been deafening from the lambasts and criticism.

Duty bound, indeed.

[The Observer]

...Since these schemes cause acutal monetary loss to the US Treasury, the IRS is duty bound to track and intercept such attempts, otherwise they would be lambasted for failing to do so. One only has to remember the criticism the IRS receives for failing to detect phony refund schemes to understand how important it is that such lists exist and are used for the purpose they were created.

Hendrickson still touts the refunds he posts by Lost Horizontals as "proof" his nonsense is correct.

The silence has been deafening from the lambasts and criticism.

Duty bound, indeed.

They are duty bound - the law specifies it as such. Your criticism is proof that the silence has not been deafening, just as much as the other valid criticisms (here and elsewhere) that the IRS needs to be more effective in detecting and preventing refund schemes, whatever their nature. The fact that Hendrickson is starting to turn and hang in the wind over his impotent and irrelevant motions in the current litigation is just another step closer to when he eventually gets shut down.

[Judge Roy Bean]

Observer - let me introduce you to the hole:

We do not believe that using an inventory database to meet this obligation violates section 3707 where the IRS maintains this inventory database on an independent computer that does not communicate with or put the illegal tax protester or any similar designation in the IRS computer master file.

Just because it's not on the master file does not mean they're not keeping track.

[Famspear]

Just because it's not on the master file does not mean they're not keeping track.

I don't think anyone is arguing that the IRS is not "keeping track."

If we view section 3707 as having been intended to prohibit the IRS from engaging in any record keeping or other enforcement activity whatsoever that results in an effective identification of tax protesters (without naming them as "tax protesters"), then I suppose you could say that section 3707 contains such a "hole." If that had been the intent of Congress, Congress could have simply repealed section 6702 in 1998 and added a statement in the 1998 Act to the effect that "no taxpayer shall be subject to any specialized enforcement activity because that taxpayer takes a legally frivolous position about tax law. Just let those crooks cheat all they want!"

I doubt if that was the intent of Congress.

Whether a particular piece of data is on the master file or somewhere else, nothing in section 3707 prohibits IRS personnel from keeping track of illegal tax protesters. What section 3707 prohibits is physically designating a person as an illegal tax protester (or similar designation) in an actual record.

We can argue back and forth about whether what Congress did in section 3707 was wise, but the IRS position -- that the Congressional intent was to force the IRS to more intensely analyze the conduct of each taxpayer in each situation, rather than simply attaching a denomination of "tax protester" to an individual -- just might be a reasonable interpretation of the statute.

The distinction between (A) labeling someone a "protester" in a file somewhere, and (B) keeping track of people who take legally frivolous positions in violation of tax law to the detriment of the public fisc (but without actually labeling such people as "tax protesters"), is a subtle but arguably significant one. When section 3707 is viewed in this context, the "hole" is not so large.

[The Observer]

Observer - let me introduce you to the hole:

We do not believe that using an inventory database to meet this obligation violates section 3707 where the IRS maintains this inventory database on an independent computer that does not communicate with or put the illegal tax protester or any similar designation in the IRS computer master file.

Just because it's not on the master file does not mean they're not keeping track.

Nor does it mean they are keeping track of tax protestors - all it means is that they are keeping track of who is filing frivolous returns. I'm still looking for your evidence that the IRS is keeping track of protestors.

[Judge Roy Bean]

...I'm still looking for your evidence that the IRS is keeping track of protestors.

"Evidence?"

I'll ask you the same style of question. What "evidence" do you have that they're not?

Let's see - We have a history of technological mismanagement. And Congress wasn't just bored back in 1988. Then we have the logical approach taken to make sure the letter of the law was being followed, if not the spirit. Let's not forget that today, we now have low cost, powerful computers in the hands of people with motive, opportunity and means.

Do you also believe in Santa Claus? I don't have any "evidence" either way.

[The Observer]

...I'm still looking for your evidence that the IRS is keeping track of protestors.

"Evidence?"

I'll ask you the same style of question. What "evidence" do you have that they're not?

Let's see - We have a history of technological mismanagement. And Congress wasn't just bored back in 1988. Then we have the logical approach taken to make sure the letter of the law was being followed, if not the spirit. Let's not forget that today, we now have low cost, powerful computers in the hands of people with motive, opportunity and means.

Do you also believe in Santa Claus? I don't have any "evidence" either way.

Really? I am not sure what kind of justice is practiced out there in the area of Pecos, but evidence has to be present in order to get a verdict of guilty against any or all IRS personnel who are accused of violating section 3707. Prior to its passage, there was nothing criminal in the IRS classifying or identifying taxpayers as protestors - there was specifically no statute forbidding it. Congress passed the law because it believed the practice was abusive and potentially prejudicial against taxpayers without providing them due process to contest the label. So trying to bring up what was occurring prior to 1988 does not mean it is happening now.

We also have a number of low cost high-powered government vehicles in the hands of these rogue IRS employees. What do you recommend we do to ensure that they are not running people over on purpose?

[Judge Roy Bean]

...

Really? I am not sure what kind of justice is practiced out there in the area of Pecos, but evidence has to be present in order to get a verdict of guilty against any or all IRS personnel who are accused of violating section 3707. ?

That's the "hole" point.

They're not violating 3707 as long as it isn't recorded in the master file.

[Quixote]

The distinction between (A) labeling someone a "protester" in a file somewhere, and (B) keeping track of people who take legally frivolous positions in violation of tax law to the detriment of the public fisc (but without actually labeling such people as "tax protesters"), is a subtle but arguably significant one.

Right. Consider Gotago's situation. She is convinced, and may be correct, that the IRS is treating her differently than they would someone whom they did not consider to be a protester. If the tax protester designation still existed, Gotago would almost certainly have been designated as one, and might still be, depending on the life cycle of the designation. If so, she would almost certainly be treated differently, making the transition from protester to compliant taxpayer much more difficult.

[The Observer]

...

Really? I am not sure what kind of justice is practiced out there in the area of Pecos, but evidence has to be present in order to get a verdict of guilty against any or all IRS personnel who are accused of violating section 3707. ?

That's the "hole" point.

They're not violating 3707 as long as it isn't recorded in the master file.

But you haven't showed me any evidence that they are maintaining any such list anywhere - you only have made accusations with vague innuendoes or irrelevant evidence. Regardless of whether you believe that only the letter of the law is being followed, in my mind any such creation of a list of tax protestors would be a violation of section 3707 - even if it was being kept on a legal pad in some bureaucrat's desk.

And if you wish to maintain the position that a list of taxpayers filing frivolous returns is equivalent to designating them as tax protestors, please explain how the IRS is supposed to respond to and deal effectively with people who love to file these returns year after year.

[Quixote]

But you haven't showed me any evidence that they are maintaining any such list anywhere - you only have made accusations with vague innuendoes or irrelevant evidence. Regardless of whether you believe that only the letter of the law is being followed, in my mind any such creation of a list of tax protestors would be a violation of section 3707 - even if it was being kept on a legal pad in some bureaucrat's desk.

That is TIGTA's position as well. And if such a list exists, TIGTA hasn't found it during their annual 3707 compliance audits.

[ASITStands]

But you haven't showed me any evidence that they are maintaining any such list anywhere - you only have made accusations with vague innuendoes or irrelevant evidence. Regardless of whether you believe that only the letter of the law is being followed, in my mind any such creation of a list of tax protestors would be a violation of section 3707 - even if it was being kept on a legal pad in some bureaucrat's desk.

That is TIGTA's position as well. And if such a list exists, TIGTA hasn't found it during their annual 3707 compliance audits.

I've seen the phrase "tax protester arguments" or "tax protester" on documents such as 'ICS History' or 'Case Activity Record.' Those represent comments from Revenue Agents or Appeals Officers.

However, there is no indicator I have found on the master file transcript indicating a tax protester.

There are some transcripts from which the previous indicator has not been removed. Before the 1998 RRA, the indicator "TC 148 HOLD IS P" appeared in the upper right-hand corner. I've seen this on some transcripts, and I know of one case where the taxpayer requested removal, and it was not removed.

They may not have made the request to the right office.

[.]

I find this entire controversy about whether the label "tax protestor" is hung on someone totally silly.

Either you is or you ain't. The IRS is quite capable of determining whether or not you maintain frivolous arguments or file frivolous returns. There's not much doubt that they continue to track morons while assiduously avoiding any tag that might ruffle the feathers of idiots, er, I mean bureaucratic auditors.

Yes, everyone deserves due process, but the '98 hearing results went overboard. Jesus, we want bureaucracy to function efficiently and then we impose a bunch of stupid crap that makes it even harder to do so, as if it wasn't hard enough to do in the first place.

Perfect! Government confounding government. Ron Paul may be a nut-cake, but he's right about getting rid of the IRS. Except that it doesn't really matter, 90% of them would be hired by some successor organization to administer whatever the replacement tax happened to be.

[Judge Roy Bean]

But you haven't showed me any evidence that they are maintaining any such list anywhere - you only have made accusations with vague innuendoes or irrelevant evidence. Regardless of whether you believe that only the letter of the law is being followed, in my mind any such creation of a list of tax protestors would be a violation of section 3707 - even if it was being kept on a legal pad in some bureaucrat's desk.

Then in your mind, IRS employees violate 3707 by visiting the Quatloos forum that tracks them - or their web sites.

And if you wish to maintain the position that a list of taxpayers filing frivolous returns is equivalent to designating them as tax protestors, please explain how the IRS is supposed to respond to and deal effectively with people who love to file these returns year after year.

I didn't raise that as an argument. I fully expect that they would use the tools and information legally available to track frivolous return filers. And they have those.

Again, the issue is the law prohibiting the label of "illegal tax protester" was created with a loophole. At the time it was implemented, the ability to create a database of this scope was something that could only be handled by a major IT department. Here we are twenty years later and major IT departments routinely struggle with ad-hoc application implementations by impatient and knowledgeable users equipped with laptops.