Amon v. United States
| Decision Date | 28 May 1981 |
| Docket Number | Civ. A. No. 80-K-809. |
| Parties | Alan D. AMON, Plaintiff, v. The UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Colorado |
Alan D. Amon, pro se.
William A. Bower, Tax Division, Dept. of Justice, Washington, D. C., for defendant.
This action seeking recovery of federal income tax payments is before the court on the parties' cross-motions for summary judgment. There are no factual disputes. Summary judgment consideration is appropriate. Plaintiff, Alan Amon, alleges that the defendant United States, through the Internal Revenue Service, conspired, with malice, to collect taxes from Amon's gross income, as derived from his compensation for services which represented his wages. Amon paid taxes to the Internal Revenue Service, but now asserts he erroneously paid those taxes and seeks to recover the amounts paid. Amon paid $94 for the year 1977, $1,621 for the year 1978, and $654.02 for the year 1979.
Amon bases his allegations on the following grounds: (1) that compensation for services which constitutes his wages cannot be subject to income taxation by the Internal Revenue Service because wages only represent an even exchange for labor, and consequently there is no gain or profit which is taxable income, (2) that with regard to the first assertion, the Sixteenth Amendment of the Constitution of the United States was not intended as a direct tax on compensation for labor, and therefore the Internal Revenue Service collected taxes in contravention of the Constitution of the United States and (3) that the taxes Amon paid are, in reality, illegally imposed excise taxes because he does not occupy a status which would ordinarily incur tax liability. He further equates excise tax as an income tax.
The government argues that the United States, acting through the Internal Revenue Service, has the constitutional and statutory power to tax Amon's gross income which is derived from compensation for services. The government further argues that Amon was properly taxed for the years in question. The government, in its motion for summary judgment, addresses the issue of whether Amon's income, as derived from compensation for services, and constituting wages, is properly taxable as income tax. Amon, in his motion for summary judgment, addresses only the issue of whether he is the proper subject for the imposition of an excise tax, which he asserts the government is collecting from his income derived from his wages. Further, Amon is appearing in this matter pro se. The obligation of this court to view his complaint with a less strict standard than a complaint drafted by one trained in the law has been scrupulously observed. Haines v. Kerner, 404 U.S. 519, 520-521, 92 S.Ct. 594, 595-596, 30 L.Ed.2d 652 (1972).
Amon alleges that his compensation for services is only an even exchange for labor. He asserts the government cannot tax that compensation because he does not experience a gain or profit from his labor. Further, Amon asserts this taxing of his wages is an unconstitutional violation of the Sixteenth Amendment which states as follows: "Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." U.S. Const. amend. XVI.
In United States v. Safety Car Heating & Lighting Co., 297 U.S. 88, 56 S.Ct. 353, 80 L.Ed. 500 (1936), the Supreme Court defined income with respect to the Sixteenth Amendment:
Income within the meaning of the Sixteenth Amendment is the fruit that is born of capital, not the potency of fruition. With few exceptions, if any, it is income as the word is known in the common speech of men * * * when it is that, it may be taxed, though it was in the making long before.
Id. at 99, 56 S.Ct. at 358. In Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 75 S.Ct. 473, 99 L.Ed. 483 (1955), the Supreme Court recognized that monies received as exemplary damages for fraud or as punitive antitrust damages fell within the definition of gross income then embodied in 26 U.S.C. § 22, the predecessor to the present day § 61. The statutory definition read: "`gross income' includes gains, profits, and income derived from salaries, wages, or compensation for personal service...." Id. at 429, 75 S.Ct. at 475. The court stated that it had frequently recognized that this language was used by congress to exert in this field "the full measure of its taxing power." Id. The Supreme Court addressed the issue of the power of congress to impose an income tax on gross income in Helvering v. Clifford, 309 U.S. 331, 60 S.Ct. 554, 84 L.Ed. 788 (1940). The court again defined § 22 of the Internal Revenue Code with respect to congressional power of taxation as derived from the federal constitution. "The broad sweep of this language indicates the purpose of Congress to use the full measure of its taxing power within those definable categories." Id. at 334, 60 S.Ct. at 556.
In Commissioner of Internal Revenue v. Jacobson, 336 U.S. 28, 49, 69 S.Ct. 358, 369, 93 L.Ed. 477 (1949), the Supreme Court reiterated the purpose of the income tax laws. "The income taxed is described in sweeping terms and should be broadly construed in accordance with an obvious purpose to tax income comprehensively." Id. at 49, 69 S.Ct. at 369. As to that position, it does not matter whether an individual's income is derived by unlawful means. In United States v. Swallow, 511 F.2d 514 (10th Cir. 1975), cert. denied, 423 U.S. 845, 96 S.Ct. 82, 46 L.Ed.2d 66 (1975) (Swallow II), the Tenth Circuit Court of Appeals commented on the comprehensive nature of taxation on compensation for services stating "when earnings are acquired, lawfully or unlawfully, without consensual recognition of an obligation to repay or restriction on this disposition, there is income." Id. at 519 (citing James v. United States, 366 U.S. 213, 219-220, 81 S.Ct. 1052, 1055-1056, 6 L.Ed.2d 246 (1961)). Taxes may also be imposed where the taxes accruing to the government are used for purposes inuring to the benefit of a certain group of people. Swallow v. United States, 325 F.2d 97 (10th Cir. 1963), cert. denied, 377 U.S. 951, 84 S.Ct. 1630, 12 L.Ed.2d 497 (1964) (Swallow I). In Swallow I, the court said of the income tax laws the following:
The income tax provisions of the Internal Revenue Code and the regulations promulgated thereunder are complex and often difficult of understanding, but we have found no authority which suggests that the statutes are unconstitutional for this reason or that the rates constitute a taking of property within the meaning of the Fifth Amendment. It is now well settled that the income tax laws are not unconstitutional under the due process clause of the Fifth Amendment, nor are they unconstitutionally defective because of discriminatory progressive tax rates.
The current statutory guidelines for income tax assessment are §§ 61 and 63 of the Internal Revenue Code. Section 61(a) of the Internal Revenue Code of 1954, 26 U.S.C. § 61(a), defines gross income as follows: "Except as otherwise provided in this subtitle, gross income means income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, and similar items; ...." Section 63(b) defines taxable income in part as follows: 26 U.S.C. § 63(b). The power of congress to collect income taxes from individuals has existed for decades. That power is clearly provided in the Sixteenth Amendment and is valid today regarding taxation of compensation for services.
With respect to the power and constitutionality of the government's collection...
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Torkelson v. Commissioner
...are wholly without merit. Income tax is not an excise tax and does not violate the Sixteenth Amendment. Amon v. United States, 514 F. Supp. 1293, 1296-1297 (D. Colo. 1981). Compensation for services is clearly gross income subject to taxation. Eisner v. Macomber 1 USTC ¶ 32, 252 U.S. 189 (1......