Lee v. United States Government, Civ. A. No. 79-739.

CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
Writing for the CourtFrancis X. Caiazza, New Castle, Pa., for plaintiff
PartiesEdwin D. LEE, Plaintiff, v. UNITED STATES GOVERNMENT and Internal Revenue Service and Jerome Kurtz, Commissioner, Internal Revenue Service, Defendants.
Docket NumberCiv. A. No. 79-739.
Decision Date15 July 1980

497 F. Supp. 180

Edwin D. LEE, Plaintiff,
v.
UNITED STATES GOVERNMENT and Internal Revenue Service and Jerome Kurtz, Commissioner, Internal Revenue Service, Defendants.

Civ. A. No. 79-739.

United States District Court, W. D. Pennsylvania.

July 15, 1980.


Francis X. Caiazza, New Castle, Pa., for plaintiff.

497 F. Supp. 181

Thomas A. Daley, Asst. U. S. Atty., Pittsburgh, Pa., Gregory S. Hrebiniak Dept. of Justice Trial Atty., Tax Div., Washington, D. C., for defendants.

OPINION

TEITELBAUM, District Judge:

This is an action for refund of $91.00 paid by plaintiff for withholding and FICA taxes on wages paid to his employees for the first quarter of 1973. The plaintiff, Edwin D. Lee, is a self-employed farmer and carpenter and a member of the Old Order Amish religion. During the years 1970 through 1977, Mr. Lee employed and paid wages to several Old Order Amish employees; however, he failed to file quarterly employment tax returns or annual unemployment tax returns, to withhold income tax or FICA tax from his employees' wages, or to pay the employer's portion of the employee's FICA or FUTA taxes. In 1978, the Internal Revenue Service assessed employment taxes in amounts exceeding $27,000. In 1979, plaintiff paid $91.00 of this amount, representing the assessment for the first quarter of 1977. His subsequent claim for refund was disallowed. The present suit was filed in July of 1979, seeking declaratory and injunctive relief from payment of the tax, alleging the payment of the tax is a violation of his First Amendment right to the free exercise of his religion.

Once again, the Court is called upon to examine the beliefs of the Amish in the context of the First Amendment. The Old Order Amish occupy a respected and time-honored position in the history of this country. Their origins date back to the 16th century Swiss Anabaptists who separated themselves from institutionalized churches to preserve a non-competitive, closely-knit community life emphasizing "goodness" and community welfare. Throughout their history, the Amish have maintained this ideal. Despite continuing encroachment of the contemporary, worldly society, they have remained independent of society, yet interdependent among themselves. In a society, witnessing the gradual erosion of such values, their efforts are worthy of preservation. Whether or not the preservation of their values falls within the present context —exemption from taxes based upon these admirable religious convictions—is the issue to be decided.

The Old Order Amish have been past recipients of both legislative and judicial grace. Section 1402(g) of the Internal Revenue Code exempts from payment of, inter alia, self-employment FICA taxes religious groups who provide their own form of old age and disability insurance to members of their sects.1 In Wisconsin v. Yoder, 406 U.S. 205, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972), the Supreme Court exempted the group from compulsory public school attendance beyond the age of 13, stressing the importance of recognizing and preserving the Order as a "highly successful social unit within our society" which "rejects public welfare in any of its usual modern forms." Plaintiff relies on the reasoning behind Yoder and 1402(g) for his argument to extend the exemption of 1402(g) and thereby relieve members of this sect from the requirement of withholding FICA taxes from Amish employees or from paying the employer's portion of FICA or FUTA taxes. His rationale is simple yet sincere: it is a sin to fail to provide for or to allow another to provide for your own people. "But if any provide not ... for those of his own house, he hath denied the faith and is worse than an infidel." (I Timothy 5:8). Accordingly,

497 F. Supp. 182
they have a built—in, fool—proof social security system of their own—they care for their aged, their sick, their unemployed. They neither need nor would be permitted to accept any form of social security payments from outside their self-sufficient community. Not only is it considered a sin to accept, it is also considered a sin to pay, for to pay is to deny their faith. It is this crucial distinction which weakens an otherwise strong argument opposing Lee's claims

The government concedes both the worthiness and the sincerity of the Amish beliefs, yet they counter with the inherent power of the government to tax. While recognizing the precedential weight of 1402(g) as a rationale for extending the exemption to include all forms of social security taxes, they argue the difference in the function of the tax. The 1402(g) exemption falls under the "income tax" provision of the Social Security tax system. The taxes at issue here—the employer's share of FICA, FUTA, and deduction of his employees' FICA taxes for which he is personally liable—are termed "excise taxes," a flat fee imposed upon an employer for the privilege of doing business, totally unrelated to the purpose served by the tax. These taxes are a contribution to a "general welfare" fund to provide for all who become dependent on society. As benefits under the SSA are not automatic, accruing only upon the filing of an application for receipt of benefits, plaintiff Lee need only refuse the benefits to avoid violating the precepts of his faith. This distinction between a self-employment payment as "income tax" and deduction and payment of an employee's tax as an "excise tax" is a distinction without a difference and raising it does little credit to the government agencies concerned. Calling a rose a violet hardly changes its odor. The distinction overlooks the key contention: Payment of the tax is the sin that burdens the free exercise of the Amishman's religion.

The free exercise of one's religion is a fundamental, natural, absolute right, firmly entrenched in the...

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4 practice notes
  • Peyote Exemption for Native American Church, 81-63
    • United States
    • Opinions of the Office of Legal Counsel of the Department of Justice
    • December 22, 1981
    ...the Amish religion considers it a sin to pay for or accept any form of social insurance outside of the self-sufficient Amish community. 497 F.Supp. 180 (W.D. Pa. 1980). The United States has taken a direct appeal to the Supreme Court. [Note: The Supreme Court reversed the district court, ho......
  • Peyote Exemption for Native American Church, 81-63
    • United States
    • Opinions of the Office of Legal Counsel of the Department of Justice
    • December 22, 1981
    ...the Amish religion considers it a sin to pay for or accept any form of social insurance outside of the self-sufficient Amish community. 497 F.Supp. 180 (W.D. Pa. 1980). The United States has taken a direct appeal to the Supreme Court. [Note: The Supreme Court reversed the district court, ho......
  • United States v. Lee, No. 80-767
    • United States
    • United States Supreme Court
    • February 23, 1982
    ...support the social security system must be uniformly applicable to all, except as Congress explicitly provides otherwise. Pp. 260-261. 497 F.Supp. 180, reversed and remanded. Lawrence G. Wallace, Washington, D. C., for appellant. Francis X. Caiazza, New Castle, Pa., for appellee. Page 254 C......
  • Simmons v. Brown, Civ. No. HM 80-1726.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • July 15, 1980
    ...will disapprove of regulations promulgated by the Secretary of the Army on either ground raised by plaintiff, the court can only note 497 F. Supp. 180 that if he is able to convince the Board that his position is correct, the Secretary may not overrule the Board's decision If he rejects the......
4 cases
  • Peyote Exemption for Native American Church, 81-63
    • United States
    • Opinions of the Office of Legal Counsel of the Department of Justice
    • December 22, 1981
    ...the Amish religion considers it a sin to pay for or accept any form of social insurance outside of the self-sufficient Amish community. 497 F.Supp. 180 (W.D. Pa. 1980). The United States has taken a direct appeal to the Supreme Court. [Note: The Supreme Court reversed the district court, ho......
  • Peyote Exemption for Native American Church, 81-63
    • United States
    • Opinions of the Office of Legal Counsel of the Department of Justice
    • December 22, 1981
    ...the Amish religion considers it a sin to pay for or accept any form of social insurance outside of the self-sufficient Amish community. 497 F.Supp. 180 (W.D. Pa. 1980). The United States has taken a direct appeal to the Supreme Court. [Note: The Supreme Court reversed the district court, ho......
  • United States v. Lee, No. 80-767
    • United States
    • United States Supreme Court
    • February 23, 1982
    ...support the social security system must be uniformly applicable to all, except as Congress explicitly provides otherwise. Pp. 260-261. 497 F.Supp. 180, reversed and remanded. Lawrence G. Wallace, Washington, D. C., for appellant. Francis X. Caiazza, New Castle, Pa., for appellee. Page 254 C......
  • Simmons v. Brown, Civ. No. HM 80-1726.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • July 15, 1980
    ...will disapprove of regulations promulgated by the Secretary of the Army on either ground raised by plaintiff, the court can only note 497 F. Supp. 180 that if he is able to convince the Board that his position is correct, the Secretary may not overrule the Board's decision If he rejects the......

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