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War Tax Resistance Made Simple

What to expect and how to prepare if you want to withhold your hard-earned cash from the Pentagon. PLUS: <A HREF="http://www.alternet.org/story.html?StoryID=15576">The Noble American Tradition of Tax Resistance</A>.
 
 
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According to the government's Unified Budget for 2003, a measly 17 percent of the federal budget is earmarked for the military, while over three times as much is spent on Social Security and Medicare. What a great government, right? When you look at the actual budget, however (that which comes from taxes, minus Social Security funds), we're spending nearly half of our budget, about $775 billion, on past and present military expenses.

These figures are about two months old, and they're probably already seriously out of whack, especially if you consider the $80 billion just granted to Bush for his war. Regardless of the specifics, the basic truth is about half of your income tax is going to the military. For all the millions of people who've taken to the streets in the past four months to prevent or oppose this war, this is like a kidney punch from behind: You may spend your days, nights and/or weekends working to preserve peace, but everyone who pays taxes is financially helping to support the war.

The obvious solution to this quandary is to just stop paying your taxes, right? So if it's that simple, why aren't the lines in the post office that much shorter on April 15?

The reality is quite complex, though considerably less fearful than most assume. Not paying taxes as a form of conscientious objection is much more common than is publicly known. While not difficult, it requires a level of commitment that may seem daunting to many. The beauty of this form of war resistance is that it is endlessly flexible, and there are people who have been able to maintain this protest for as long as they've been in control of their income.

The Daily Protest

In early March, before the war started, I attended a War Tax Resisters support and information meeting at a small Unitarian church in tree-lined Berkeley. About 25 people came together to learn some of the details of this movement and to share their hopes, fears and experiences.

As one attendee put it, "Not paying taxes is a way you can protest every day," as opposed to marching once a month to protest. Susan Quinlan, a Bay Area organizer for the National War Tax Resistance Coordinating Committee (NWTRCC), gave me a brief rundown of her 20-year experiences with war tax resistance -- including the time IRS agents came to her door "requesting" an appearance in their office, and the time she quit her job in order to prevent the government from deducting money from her wages.

This is not to scare potential tax resisters, merely to underscore the level of commitment necessary to ride the peaks and troughs of this form of civil disobedience. One immediate lesson to learn is that there will be peaks and troughs, but that the troughs are not as deep as commonly feared: Quinlan pegs the number of war tax resisters who have seriously faced jail time at less than 20 over the past 50 years.

People who are outraged by the war and are looking for serious ways to get involved with the resistance find tax resistance a powerful tool. If even one percent of the people who participated in anti-war protests this year sent a protest letter in lieu of a check to the IRS, we would see some political heads snap to attention. What follows is a beginner's guide to tax resistance, followed by a brief discussion of other, less illegal, ways to make your point.

Screw the IRS: A Step-By-Step Primer

Tax resistance begins by controlling your income. This means one of two things -- getting paid under the table or, for most of us, managing your income withholding. Strictly speaking, the allowances you claim on your W-4 form are used to increase the amount of money you can take home to care for dependents, or can be used to offset some refund you know you'll be getting come tax time. Because you don't have to identify your dependents on your W-4, and your employer can't ask you about the reasons behind your allowances, tax resisters can use these allowances to decrease the taxes they're paying.

However! If, like me, you work for a company that you like and that does Good Work, you should be aware that if you claim more than 10 allowances on your W-4, your employer must either reject your W-4 or notify the feds, or else your employer can be held legally and financially responsible for your unpaid taxes. So unless you work for Bechtel or Raytheon, claim nine or fewer allowances.

By increasing your allowances, you are effectively taking money out of the government's coffers. Congratulations -- you're now breaking the law! From this point on, there are three important questions you're going to have to deal with. Primarily, the questions are: what will you do with all that extra money? What are you going to do come Tax Day? And what will you do when the Tax Man comes after you? Let's take these one at a time.

Where's Your Money Going?

The question of what to do with your newly liberated tax money is primarily an ethical one, having to do with what you'd rather have the government spend tax dollars on. Let me insert just one suggestion: If you take your newfound income and buy a new Hummer H2 with it, you're not so much protesting military spending as you are just stealing from the government. That said, here are a few common ways that tax resisters redirect their money.

1) Stash it in savings. Some tax resisters put their extra money into a savings account (preferably a small, local credit union and not something like Citibank) and use the interest generated by the money either as a fund to pay off fines and penalties, or donate it to charity. The catch with this method is that the account should be in someone else's name, since the government will try and deduct funds from a resister's bank accounts as their first method of collection. Have a friend or family member who is not a tax resister hold the money for you. A sure way around this kink is:

2) A group escrow account. This sort of account improves on #1 in several ways: it's in the name of a community organization, so any number of tax resisters can safely store their money in the fund without fear of collection; more money going into a single fund allows for more interest, which can then be used to quite literally spread the wealth to charitable organizations or to fight off IRS fines.

You can find out about local escrow accounts from the War Resisters League and the NWTRCC. There will also be more discussion of the money aspect in the "Consequences" section below.

Stand Up and Be Counted on April 15

So how are you going to announce your dastardly actions to the IRS? How you file (or don't file) depends on your conception of activism, and how much you want to fly in the face of collection. Here are five ways to deal with Tax Day.

1) Symbolic withholding. This is the form of resistance that requires the least amount of preparation and effort. You can go about your daily life as you currently do, and when you fill out your taxes, if you happen to owe money, you can withhold some of this amount (many resisters choose to withhold $10.40) with a letter of objection. The amount you withhold can be as small or great as you like.

2) Complete withholding. Adjust your W-4 allowances to whatever level you're comfortable with, and when Tax Day comes around, fill out your 1040 normally, but in lieu of a check include your statement of conscientious objection. Make sure you save a copy of this letter, for reasons I'll discuss below.

3) The Blank 1040. Same as #2, but you just sign a blank copy of the 1040 and send in your letter of objection.

4) File a "Zero Return." You fill out a 1040, but with zeroes in all the fields. Sign it and send it in. One of the resisters I spoke with said this method had worked for him for five years. In light of the arbitrary nature of IRS collections, that doesn't mean too much, but there is a small and seemingly apolitical movement around the Zero Return.

5) Off the books. Simply don't file a 1040 at all.

The potential for collection on each of these can vary quite a bit. No. 1 is the safest, especially if you're withholding only a small amount of money. No. 5 makes is considerably harder for the IRS to track you down, if they ever do. Numbers 2-4 are high profile statements of dissent, and you're basically asking the IRS to come after you, but thanks to the economic crisis and the size of the IRS bureaucracy, that could take years to happen, if ever.

Depending on how you feel about making your dissent known, as well as to whom you make it known, you may just want to skip filing entirely and spend your extra time and money helping to improve the world. For people who want to voice their displeasure with Uncle Sam's warlike tendencies, go ahead and send that letter in.

Do You Fear the Tax Man?

When it comes right down to it, much of the IRS's power comes from fear -- the fear accrued by hyping their ability to find you, pin you down, take your money, and send you off to prison.

The reality is that the IRS is chronically underfunded, faces a mountain of work for a relatively small staff, and even when tax evaders are caught, prison is rarely the result. When deciding to become a war tax resister, if you are committed to the effort, do some planning for the eventuality of tax collection and join a community of resisters, the biggest threat you face will be the worry of when they'll catch on to you, and not what you'll do when that happens.

The results of not paying taxes seem arbitrary and unpredictable: one person may have no notices, visits, fines or penalties from the IRS, and another may go through collection hell. And the story can change from year to year, so that you always have to be on your toes.

The best bet for resisters is to be prepared. Keep some money in a separate account that you can draw upon in case the collection process gets too intense. Everyone will have their own limit. If collection is becoming more effort or fear then it's worth, there is nothing wrong with paying the IRS to get off your back.

Escrow accounts are one of the most tried-and-true methods for holding your erstwhile tax money in limbo. Most accounts, like one set up by the AFSC, will allow resisters to withdraw some or all of the funds they've donated in order to pay off the IRS. Another novel solution is the War Tax Resisters Penalty Fund, which serves as a communal pool to help resisters pay fines and penalties. When the IRS sends a notice of collection, a resister can send the Fund a copy of the notice as well as the original statement of conscientious objection, and the Fund will send out an appeal for donations, so that all resisters in the group can donate a small amount to help others out, knowing that the same will happen for them if they need help. [Note: At press time, the Penalty Fund's page was inoperable, but you can view a cached version here.]

Going the Legal Route

Clearly, tax resistance isn't going to work for everyone. Thanks to the crappy economy and the general trend of sending jobs elsewhere in the world, many people have enough worries about getting food on the table without having to stay ahead of the IRS. Fortunately, there are some other options that are completely legal, and can help you avoid paying for the massive military budget.

One form of resistance you can begin today is to reduce your taxable income. Called, among other things, voluntary poverty or simple living, the goal is to live in such a way that your traceable income is under the level that would require you to pay taxes. What level is that? Generally speaking, if you can stay under $10,000 in income a year, you'll be able to skip the 1040. Obviously, this tactic becomes quite difficult if you live in a major urban area or have a job that won't pay you under the table. But you can reduce your income in a lot of clever ways. First and foremost would be to watch what you consume. Do you really need 500-channel satellite cable? Do you really need DSL, for $50 a month? Do you really need your car? That's a tough one, I know, but especially for the city-dwellers, cars are quite often more trouble than they're worth, with parking and maintenance and now gasoline prices conspiring to make them chronic headaches.

Other ideas to reduce your expenditures center around creating a community of resisters. For instance, working with like-minded friends can create small economies of scale and barter systems that can make it cheaper to buy food in bulk, trade skills and services, and any of a million way to work within the " Underground Economy."

More policy-minded ideas in the works include the Peace Tax Fund, a noble effort that is scrambling to find a foothold in these "support our troops" times. It would, if passed, institute a non-military fund into which taxpayers could funnel their money, to then be used for health care, infrastructure, education, etc.

Other Taxes to Avoid

The income tax is the largest tributary to the Pentagon's budget, but it's far from the only one. Some other taxes have been in existence for decades, and a whole slew of others have been introduced in the past few years, especially since 9/11, to pad the DoD's pockets.

One of the first federal taxes to spark opposition is the Federal Phone Tax. This tax has been in existence since 1914, and has been specifically created to raise money for the various major wars since then. Originally introduced as a "temporary" tax, after 76 years the Congress finally made it permanent, and set its level at 3 percent of your phone bill.

Resistance to the telephone tax has a long and established history, and most phone companies will put up no fight to resisters who will not pay it, since they're just as happy to not collect taxes for the government. Simply include a note saying that you refuse to pay your federal excise tax for conscientious purposes, and pay the rest. Socially responsible phone companies like Working Assets make it easy for you by highlighting the federal tax portion of your bill.

That's the easiest non-income tax to avoid. The others are much harder to refuse, because they're intricately woven into the fabric of our daily lives. These are federal taxes included in the purchase of alcohol, gasoline, and air travel. Refusing to pay these taxes, especially airline travel in these tense times, means finding other ways to travel and get your jollies.

Go Ahead, Stick Your Neck Out

War tax resistance isn't easy. It's a constant struggle and its rewards are primarily ethereal. But the reasons underlying it, and the current need to take a stand, are profound and urgent. This is a movement that can make an enormous difference if enough people join the battle. Having spent the last month learning about the extraordinary community of people who have made tax resistance a way of life has opened my eyes to the spectrum of possibility for resistance, and has made me a believer.

For more information on tax resistance, read a short article by Gar Smith called " The Noble American Tradition of Tax Resistance."

Matt Wheeland is an associate editor of AlterNet.