Adams v. C.I.R.

• Citation: 170 F.3d 173
• Decision Date: 04 March 1999
• Docket Number: No. 98-7200,98-7200
• Parties: -1001, 99-1 USTC P 50,307 Priscilla M. Lippincott ADAMS, Appellant v. COMMISSIONER OF INTERNAL REVENUE
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 173

170 F.3d 173

83 A.F.T.R.2d 99-1001, 99-1 USTC P 50,307

Priscilla M. Lippincott ADAMS, Appellant v. COMMISSIONER OF INTERNAL REVENUE

No. 98-7200.

United States Court of Appeals, Third Circuit.

Argued Jan. 14, 1999.

Decided March 4, 1999.

Peter Goldberger (Argued), James H. Feldman, Jr., Ardmore, PA, Attorneys for Appellant.

Loretta C. Argrett, Assistant Attorney General, Michelle B. O'Connor (Argued), Gilbert S. Rothenberg, Tax Division, Department of Justice, Washington, DC, Attorneys for Appellee.

Before: GREENBERG and RENDELL, Circuit Judges, and DEBEVOISE, District Judge ^*

OPINION OF THE COURT

RENDELL, Circuit Judge.

Priscilla Adams claims that Religious Freedom Restoration Act ("RFRA") requires accommodation of her religious beliefs so that her tax payments do not fund the military. She also argues that RFRA and the free exercise clause mandate a finding that her religious beliefs constitute "reasonable cause" under 26 U.S.C. § 6651 for her failure to file returns or pay tax and an "unusual circumstance" which makes it "against equity and good conscience" for the Commissioner to impose the penalty for failure to estimate under 26 U.S.C. § 6654.

I. Factual and Procedural History

The facts are not in dispute. Adams is a devout Quaker; she currently works as a "Peace Field Secretary" for the Philadelphia Yearly Meeting of the Religious Society of Friends. She sincerely believes that participation in war is contrary to God's will, and hence, that the payment of taxes to fund the military is against the will of God. From 1985 to 1989, Adams declared herself exempt from taxation, so no federal income tax would be withheld from her pay. In 1989, the IRS sent a letter to her employer, the Philadelphia Yearly Meeting, directing it to withhold taxes from her salary as if she were married and claiming one withholding allowance.

Adams has taken pains to ensure that she does not profit from her tax protests and to demonstrate that her beliefs regarding refusal to pay taxes are sincere and are the result of being called or directed by God, in that she has been tested and challenged by "clearness committees" of members of her Meeting that have been convened to examine her beliefs on this topic. They have determined that the course of her conduct is the result of a "leading" from God. She asserts that she would voluntarily pay all of her federal income taxes if the money she paid were directed to a fund that supported only non-military spending, or if her payments could be directed to nonmilitary expenditures, or that, with the consultation of a clearness committee, she would be willing to consider any other form of accommodation of her beliefs that could be offered by the government.

The Commissioner assessed deficiencies and penalties against Adams for the years 1988, 1989, 1992, 1993, and 1994. The Tax Court determined that Adams was not exempt from the payment of taxes under RFRA and was liable for the deficiencies and penalties assessed against her, relying on United States v. Lee, 455 U.S. 252, 102 S.Ct. 1051, 71 L.Ed.2d 127 (1982), and other case law preceding Employment Division v. Smith, 494 U.S. 872, 110 S.Ct. 1595, 108 L.Ed.2d 876 (1990). Adams now appeals to this court. We have jurisdiction pursuant to 26 U.S.C. § 7482(a) (1994). Our review is plenary, as all of the issues raised are matters of law. See Geisinger Health Plan v. Commissioner, 30 F.3d 494, 498 (3d Cir.1994); Lazore v. Commissioner, 11 F.3d 1180, 1182 (3d Cir.1993).

II. Discussion

A. RFRA Claim

The parties do not contest the constitutionality or the applicability of RFRA to the case at hand. They agree that RFRA applies to the federal government, as Boerne v. Flores, 521 U.S. 507, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997), held only that RFRA was unconstitutional as applied to the states under section 5 of the Fourteenth Amendment. For the purposes of this appeal, we assume without deciding that RFRA is constitutional as applied to the federal government. See Alamo v. Clay, 137 F.3d 1366, 1367 (D.C.Cir.1998). ¹

RFRA provides:

(a) In general

Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.

(b) Exception

Government may substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person--

(1) is in furtherance of a compelling governmental interest; and

(2) is the least restrictive means of furthering that compelling governmental interest.

Adams argues that under RFRA, she is exempt from federal income tax for the years in which she has been assessed a deficiency, because requiring her to pay these taxes substantially burdens her religious beliefs. She concedes that the government has a compelling interest in the collection of taxes, but contends that the IRS failed to meet its burden under RFRA of proving that it could not accommodate her, that is, that there is no less restrictive means of furthering the government's interest. She argues that this failure of proof requires this court to reverse the Tax Court and find that Adams owes no taxes for the years in question, and that she is not required to pay income taxes so long as the Commissioner does not act to accommodate her objections. Adams contends that she is not asking to be exempted from the payment of taxes altogether, but that she wants her beliefs to be "accommodated," because RFRA requires that the IRS accommodate her objection, unless the refusal to do so is the "least restrictive means" for achieving the government's compelling interest in tax collection. The Commissioner accepts Adams's acknowledgment that the government has a compelling interest in the collection of taxes, and urges us to find that the current system--uniform and mandatory in nature--is the least restrictive means of furthering that interest.

There is little doubt that RFRA was enacted as a direct response to Employment Division v. Smith, and to restore the tests that were routinely employed before the Supreme Court's ruling that neutral, generally applicable laws may impinge on religious practices, even in the absence of a compelling state interest. See 494 U.S. at 882-84, 110 S.Ct. 1595; Boerne, 117 S.Ct. at 2161. RFRA requires courts to employ the test set forth above in the statutory language. First, the claimant must demonstrate a "substantial burden" on her exercise of her religious beliefs. If she does so, the burden shifts to the government to demonstrate that the regulation or practice at issue furthers a "compelling interest," and that it furthers that interest by the "least restrictive means." See § 2000bb-1; Small v. Lehman, 98 F.3d 762, 767 (3d Cir.1996), overruled by 521 U.S. 507, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997). ²

In enacting RFRA, Congress specifically announced its intent to "restore" the "compelling interest" test set forth in Sherbert v. Verner and Wisconsin v. Yoder:

The purposes of this chapter are--

(1) to restore the compelling interest test as set forth in Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963) and Wisconsin v. Yoder, 406 U.S. 205, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972) and to guarantee its application in all cases where free exercise of religion is substantially burdened; and

(2) to provide a claim or defense to persons whose religious exercise is substantially burdened by the government.

§ 2000bb(b).

However, Congress's intent with regard to the precise contours of the elements of the RFRA test is a somewhat different matter, as neither the statutory provisions, the legislative history, nor the floor debates indicate exactly how the elements of the test are defined, or are defined in relation to the pre-Smith case law. See § 2000bb(a); § 2000bb-2; S.Rep. No. 103-111 (1993), at 5-9, 15-16, reprinted in 1993 U.S.C.C.A.N. 1892, 1894-98, 1904-05; see also 139 Cong. Rec. S1415-01, S14515-16 (daily ed. Oct. 27, 1993) (statements of Senator Chaffee); 139 Cong. Rec. S14461-01, S14462, S14468, S14469 (daily ed. Oct. 26, 1993) (statements of Senators Feingold, Lieberman, and Bradley); 139 Cong. Rec. S14350-01, S14350, S14353 (daily ed. Oct. 26, 1993) (statements of Senators Kennedy and Hatch); 139 Cong. Rec. H2356-03, H2356-59, H2360-61 (daily ed. May 11, 1993) (remarks of Representatives Brooks Edwards, Fish, Hughes, and Schumer); The Religious Freedom Restoration Act: Hearing on S. 2969 Before the Comm. on the Judiciary of the United States Senate, 102nd Cong. 2, 129-35 (Sept. 18, 1992). While prior cases touched on one or more of the aspects of the RFRA test, these elements--substantial burden, compelling interest, least restrictive means--did not constitute a comprehensive standard, let alone a uniform or established test, prior to Smith. ³ The instant case presents the issue, as to whether, and if so, how, we should construe RFRA in light of prior case law. The legislative history of both the House and the Senate versions of RFRA contain explicit indications that prior case law is central to the understanding of the compelling interest test:

The committee wishes to stress that the act does not express approval or disapproval of the result reached in any particular court decision involving the free exercise of religion, including those cited in the act itself. This bill is not a codification of the result reached in any prior free exercise decision but rather the restoration of the legal standard that was applied in those decisions. Therefore, the compelling interest test generally should not be construed more stringently or more leniently than it was prior to Smith.

S. Rep. No. 103-111 at 9; H.R.Rep. No. 103-88 at 21 (1993); 1993 U.S.C.C.A.N. at 1898. ⁴

The legislative history accompanying the Senate bill also includes the following directive: "The committee expects that the courts will look to free exercise cases decided prior to...