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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).
Discussion
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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Last modified: May 25, 2011