Ronald and Dorthea Joling - Page 4

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          distribution due to the liquidation of individual retirement                
          accounts and/or pension plan.  During the years 1994, 1995, and             
          1996, petitioners received interest income from bank account(s).            
               Petitioners’ legal premise is that the income tax is                   
          actually an excise tax and that they did not engage in any                  
          “excise taxable activities” during the years in issue.2                     
          Petitioners have gone to great lengths to support their premise             
          by citing cases, statutes, and related legal materials.  After              
          thorough review, we hold that petitioners’ legal premise is in              
          error and that petitioners have misconstrued the cited legal                
          materials.  We briefly review petitioners’ arguments.                       
               Petitioners present their legal argument in the classic                
          syllogistic form; i.e., (1) “the income tax is * * * an indirect            
          tax, in the nature of an excise [tax]”; (2) petitioners engaged             
          in no activity that is subject to excise tax; (3) therefore,                
          petitioners are not subject to tax.  Petitioners’ initial                   
          premise, however, is fallacious in treating the income tax as               
          synonymous with, or the same as, an excise tax.  Petitioners’               
          reasoning is specious and circuitous in other respects.                     
          Petitioners’ initial premise derives from early Supreme Court               
          cases where the constitutionality of an income tax was being                

               2 Petitioners specifically concede that “the federal income            
          tax laws are valid and constitutional.”                                     

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