FICA has been a thorn in my side since I started my experiment in tax resistance. I’ve been able to find practical, legal methods of avoiding the federal income tax and even some excise taxes, but FICA (a.k.a. the “payroll” or “social security” tax) has turned out to be a tougher nut to crack.
Looked at in one way, it should be an easy tax for me to resist. Because I’m self-employed, I pay FICA by writing a check and sending it to the U.S. Treasury four times a year. If I want to stop, I just stop sending the checks. This makes it much easier for me than for people whose FICA contributions are withheld directly from their paychecks.
What’s holding me back, then, has been my feeling that there isn’t much point in resisting this way. If I did stop paying, I imagine, the IRS would probably attach some sort of penalty to what they figure I owe and then start charging interest on top of that. By the time they got around to seizing the money from my bank account or from the checks that clients pay me, they’d be seizing more than I would have given them originally.
Two possible answers to this objection are 1) maybe if they have to go through a lot of fuss to go after you, it’ll cost ’em so much to do so that even with interest and penalties they’ll end up behind money-wise, and 2) maybe you could reorganize your financial profile so as to be harder to collect from (see, for instance this helpful guide on How To Resist Collection from the National War Tax Resistance Coordinating Committee).
The first of these answers may be true, but I wouldn’t know where to begin to do the math to find out for sure. It is difficult to predict the government’s policies and rules (certainly the law is little help in this regard). The War Resisters League book War Tax Resistance ( edition) claims that “Except in rare instances (e.g., when extremely large amounts of money are owed) the extra money taken by the IRS will not cover the collection costs. In dealing with tax refusers, often the IRS has spent more than it has collected.” Perhaps this is so.
The second answer (reorganize my finances to make it harder to collect) I’ve given some thought to, but I’m also not sure where I’d begin. I don’t have much in the way of tangible assets to seize, but I do have bank accounts, an IRA, and such — and I can’t imagine it would be difficult for the IRS to find such things and dip their fingers in. Once upon a time, tax resisters could keep moving from bank to bank, or open accounts using nicknames, or open non-interest-bearing accounts that the IRS would never learn about… but in these post-“PATRIOT Act” days, I doubt this would get me very far. I could withdraw all the money from my bank accounts and stuff the cash in my mattress, but that’s not an option with an IRA.
Even if the IRS were able to seize the money from me without much effort, and even if it did add interest and penalties, would it be worth it to force them to take the money rather than handing it over meekly? I’m not sure. There is some worth to such a gesture, but I’m not convinced that there is much worth to it. It is possible that the penalties and interest would be worth more to me than the gesture would.
There are other options. I could switch over to the underground economy, for instance. That is an attractive solution, but might be difficult to do. Also, I’d have to be less-forthcoming about my activities here on The Picket Line.
So I continue to mull it over. My next FICA payments are due on .