Quest to Defeat IRS `Beast' Characteristic of Income Tax Protesters

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PHOENIX -- Tom Martell sits in the federal penitentiary at Las Vegas, a prisoner of conscience.

The Arizona tax rebel had no criminal record before his conviction in January. Then the Gila County reserve sheriff's deputy defied Uncle Sam and lost.

Martell has been torn from his wife and stepchildren. He owes $218,000 in back taxes and penalties. His masonry company in Payson is gone. Upon release in June, he faces five years of house arrest and probation. Martell's crime, prosecuted in the U.S. District Court: failure to file federal income tax returns. "I fought the good fight, but I understand now that as a Christian I must submit to them," Martell, 53, said in a recent phone interview. "Had I anticipated the atrocity I would be exposed to, I wouldn't have done it." Martell is not alone in challenging the government's authority to impose and collect income taxes. The U.S. Treasury loses an estimated $130 billion each year because of citizens who underpay or file no return. One IRS official recently told Congress that hundreds of thousands of tax protesters file blank 1040 forms, or none at all. A bulletin on the World Wide Web, advertising one of many anti-IRS books, proclaims: "Lawfully!!! STOP paying income taxes. The United States government is a foreign corporation in respect to the other 50 states." Most of the hard-core resisters are ultraconservative, middle-age, white, professed-Christian males. Call them Freemen or constitutionalists. By whatever name, they combine a phobia of the feds with heroic notions of defeating "the beast": the IRS. They view the agency as an arm of a global conspiracy, involving the United Nations, the Trilateral Commission, the Federal Reserve Board, communists and Jews. The most rabid disclaim citizenship, renounce Social Security numbers, spurn driver's licenses and repudiate federal authority. One of them, Irwin Schiff, so hates the IRS that he's entered the presidential race on the Libertarian ticket. "Let me tell you something," said Schiff, 67, of Las Vegas, author of How Anybody Can Stop Paying Income Taxes. "Income tax is collected on the basis of fraud, extortion and ignorance." Besides shunning tax laws, some resisters turn to violence or harassment of federal officials. The most radical have bombed IRS offices and killed federal agents. A leader of the Pilot Connection Society, a notorious anti-tax group, filed phony liens against the property of revenue agents and federal judges. Last year, six leaders of the group, including Douglas Carpa of Phoenix, were convicted on felony counts, including tax evasion and mail fraud. Michael Yamaguchi, U.S. attorney for northern California, described the Pilot Society leaders as rip-off artists who bilked consumers for $10 million and cost Americans $150 million in lost revenue. "The requirement to file tax returns and pay income tax, state or federal, is not a law that a person can choose to ignore," Yamaguchi warned. "The so-called `Patriot Untax Community' is hereby put on notice." While thousands of rebels refuse to file taxes, IRS officials admit that few are prosecuted. The agency has launched 340 criminal investigations against tax resisters since 1993, winning 162 convictions. Timothy Lee, chief of criminal investigations in the Phoenix office, said Arizona does not seem to be a hotbed, despite the state's reputation as a haven for self-styled "sovereign citizens." In the past three years, he said, there have been seven convictions in Arizona, New Mexico and Nevada. Most evaders are pursued in civil court. "These things go in cycles," Lee added. "I think it (resistance) is definitely higher profile than it was a few years ago. "If somebody's telling you that you can be untaxed, I guess that's the word, hang onto your wallet." America's first income tax, aimed at the wealthy, began and ended with the Civil War. A subsequent levy in the 1890s was ruled unconstitutional. …