Building Better Informed Americans

Building Blocks for Liberty

Income Taxes and Bridal Dresses

 July 14, 2017              Frank Kuchar

It has just now come to light that a few months ago, in Garland, Texas, 20 armed IRS agents swooped down upon a mom-and-pop bridal store owned by two elderly immigrants from Thailand and seized their entire inventory and equipment for alleged unpaid back income taxes.  The designer dresses, valued at around $615,000 were sold for pennies on the dollar along with other assets such as sewing machines, a flat screen television, game console as well as the hat of Vietnam Veteran customer who had left it there to have some patches sewn on.  The total net take for the IRS:  around $17,000!  As a result, this elderly couple is left destitute and out of business after 34 years of operation.

The authority upon which the IRS relied in this robbery is 26 CFR (Code of Federal Regulations) 301.6335-1, “Sale of Seized Property.”  Note that this is not a law passed by the national legislature (Congress), but rather is part of the 80,000+ pages of “laws” promulgated by an unelected bureaucracy (IRS) which has both written “laws” (i.e., regulations) – a legislative act, interpreted how to apply these “laws” – a judicial act, and enforced these “laws” – an executive act.  Clearly no separation of powers as designed by our founders in the Constitution.

Citizens of the United States are guaranteed the right to protection against such acts by our government:   “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized” (4th Amendment, US Constitution).

According to news reports, the IRS did obtain court authorization upon their presentation of an affidavit, but the broader question is “Was this ‘reasonable’?”  If you read the complete set of guidelines of the CFR I referenced above, it appears the IRS violated its own protocols.  Not only this, but in seizing some of the non-clothing items they seized items outside the court’s authorization, especially the hat that belonged to someone not involved in the tax dispute.  If you or I do that, it’s called “theft of personal property” and we go to jail!

What is more outrageous is the speed with which this was carried out.  According to the CFR there is supposed to be at least a ten-day period between serving notice of the pending sale and the commencement of the sale; but if the IRS believes that the items to be seized are “in jeopardy” of losing their value, the items can be sold immediately without any further due process.  Designer bridal dresses “in jeopardy” of losing their value??  Seriously – weddings are going to cease and the dresses be of no worth unless disposed of immediately?

Clearly this action by the IRS costs us taxpayers much more than what they recovered by the sale of these assets.  Furthermore, the tax returns for the years in question indicate that the couple had a carryover of a net operating loss, and thus no taxes would have been owed.  Also, a memo written by an IRS supervisor obtained via the Freedom of Information Act issued a directive to agents to “shut down this failing business.”  If freedom is to be preserved, this insidious income tax and the agency it gave birth to must go.

We are no longer free my fellow Americans.  Unelected bureaucrats in these unconstitutional agencies (admittedly the IRS was created to enforce the 13th amendment) tell us what we can do with our property (EPA), what products we can produce (Dept. of Commerce), how much people must be paid by employers (DOL), how we are to obtain health care and related insurances (HHS), and how much disposable money from our earnings we’re allowed to keep (IRS).  The government, via these bureaucracies, control our property, our businesses, our health and our incomes, and our representatives in Congress do nothing to stop them.  You tell me – if the government controls these critical aspects of our lives (and there’s more), then how is it we can consider ourselves to be “free”?

James Madison said in Federalist #47:

"The accumulation of all powers, legislative, executive and judiciary, in the same hands, whether of one, a few, or many and whether hereditary, self-appointed or executive, may justly be pronounced the very definition of

Five Points on the 14th Amendment and the Incorporation Doctrine

Since there have been many fallacies thrown around regarding the 14th Amendment in the last few days, I thought some clarifications were warranted:

1) Notwithstanding the views of those who contend that the 14th Amendment was not properly ratified (I share in the belief that it was not, along with several prominent American historians such as Forrest McDonald), the amendment did not grant the federal government an interventionist mechanism to police the states and usurp state authority for powers that were reserved to each state.

2) The 14th Amendment’s chief purpose was to affirm the new freedmen the same due process rights shared by their white counterparts, and to constitutionalize the 1866 Civil Rights Act.

3) Regarding “equal protection under the law” – if the right was not afforded to a white citizen in 1866, it wasn’t expected to be furnished to anyone according to the amendment’s advocates. In modern application, the prose has been used to justify a whole host of new “rights” that are usually privileges paid for by one class and distributed to others through governmental force. The notion that the 14th Amendment intended to bring about these privileges through 20th/21st century jurisprudential misapplication is demonstrably ludicrous.

4) The view that the 14th Amendment “incorporated” the federal bill of rights as limitations against the state governments does not withstand historical scrutiny – the federal courts did not even try to make this claim until more than 55 years after the 14th amendment’s ratification. The definitive narrative that articulates this position is Raoul Berger’s “Government by Judiciary.”

5) Most obviously, the 14th Amendment did not overturn or override the implicit principle, or the explicit verbiage codified in the 10th Amendment, that all powers that the states did not delegate to the federal government were reserved to the states or the people.


The Good Justice Is Just a Judge by Another Name

by John O. McGinnis

Supreme Court observers have expressed surprise and some have voiced criticism that Neil Gorsuch has been so assertive at oral argument and in his opinions so early in his tenure. Most justices have taken some time to decide how to approach this very important job.  Justice Stephen Breyer in fact claimed he was “frightened to death” for his first three years.

But Gorsuch’s confident performance flows directly from his formal conception of law. Being a Supreme Court justice for a formalist is no different from being any other kind of judge and in particular no different from being the Court of Appeals judge Gorsuch had been for over ten years. Under this view, the lawful judge should render judgment on the basis of his best judgment about the meaning of statutory and constitutional provisions that are put before him or her and candidly set out the reasoning in support, regardless of the political consequences and regardless of what others think.  Thus, as a formalist and experienced judge Justice Gorsuch was able to act forcefully from day one on the Supreme Court.

In contrast, for non-formalists like Justice Breyer, the work of the Supreme Court is fundamentally different from that of other judges because in many cases justices must act more like pragmatic statesmen rather than formalist jurists. Indeed,  Justice Elena Kagan implicitly suggested that there were actually two Supreme Courts—one that looks like a formal court and another that in important cases looks more like a Court of constitutional values. Under the pragmatic conception of the Court, justices are concerned about the political reaction to their decisions by the public and press as well as the reaction of their colleagues to their opinions, because that reaction makes a difference to the long-term consequences of their decisions and opinions.   Thus, these kind of justices are naturally cautious until they better understood how such feedback works.

To be sure, some questions divide formalists, such as the weight, if any, to be given to legislative history in statutory interpretation.  But Gorsuch has served long enough on the Court of Appeals to come to rest on such issues.  It might be argued that the work of the Supreme Court is different from that of other courts,  because the cases it gets are more likely to be in equipoise with powerful arguments on both sides. But as Mike Rappaport and I have observed and Gorsuch himself has said, even in close cases there is an answer based on formal materials that is slightly better and a judge is obliged to give it. Thus, the criticism of Gorsuch’s early assertiveness is just more criticism of his formalism, and for us formalists, it is just another indication of his soundness.

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