How Courts Respond: The Sanction Regime and the Doctrine of Non-Engagement

The procedural reality

A taxpayer who walks into Tax Court with a constitutional challenge to the income tax — any version of one — is not entering a forum that will engage the merits. The judge will refuse to “address frivolous arguments at length” and will likely impose a §6673 penalty up to $25,000 for raising them. This is not a bug in the system; it is the system functioning exactly as the courts have designed it.

The doctrinal foundation comes from Crain v. Commissioner, 737 F.2d 1417 (5th Cir. 1984), which held that courts have no obligation to “refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit.” The court cited the maxim that no answer is possible to certain claims because no rational engagement is owed.

What “frivolous” means in practice

The IRS publishes an annual catalog called “The Truth About Frivolous Tax Arguments,” which lists categories of claims that will trigger sanctions. The categories are broad enough to capture almost any constitutional, jurisdictional, or definitional challenge to the income tax. They include:

• Wages are not income.
• Filing is voluntary.
• The Sixteenth Amendment was never properly ratified.
• Federal jurisdiction is limited to D.C. and territories.
• Federal Reserve Notes are not lawful money.
• The IRS lacks delegated authority.

A taxpayer who advances any of these arguments — even in passing, even as a secondary theory — risks an automatic $5,000 penalty under §6702 for filing a frivolous return, plus a §6673 sanction up to $25,000 for litigating the position in court.

The structural problem

The sanction regime solves a real problem: the courts cannot afford to relitigate settled questions every time a new pro se filer raises them. Engagement at the merits would invite a flood of repetitive litigation that would crowd out cases involving genuine disputes.

But the regime also produces a perverse outcome: the courts have committed themselves to a position they will not defend on the merits. A serious scholar who raises a sophisticated version of one of these arguments — say, that Glenshaw Glass expanded “income” beyond its constitutional meaning — gets the same treatment as a sovereign-citizen filer who insists their name in all caps is a separate legal entity. This is institutionally efficient and intellectually indefensible.

Verdict

Foreclosed. The doctrine is settled in practice. Litigation of any alternate tax theory in federal court will produce sanctions, not engagement. This essay is not a recommendation; it is a description. Anyone considering raising one of these arguments in court should understand that the merits are not the question. The procedural posture is the question, and the procedural posture is closed.

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