I.R.S. Cheats Taxpayers Out of Refunds

So, as you may remember from the many times The Picket Line has tuned in to this particular soap opera, for years the IRS — without legal authorization — charged an excise tax on certain phone plans that were billed by the minute regardless of the geographical distance of the call.

They kept insisting they could tax these calls, various lawyers kept up with the great tax protester refrain of “show me the law!”, and, various district courts agreed with the protesters that the IRS was taking people’s money illegally.

The agency eventually capitulated — sort of. They stopped collecting the tax, admitted they were wrong to have been collecting it in the first place, and volunteered to come up with a method for refunding the money they had been illegally collecting all these years (well, at least going as far back as the statute of limitations — they’re no fools).

Naturally, the method they concocted for giving refunds ended up returning to taxpayers only a fraction of what had been illegally stolen from them in the first place. So some of these taxpayers fought back in the courts.

The District of Columbia circuit court sided with the taxpayers, saying the suit can go through. Here’s how the court summarizes the case:

In sum, the IRS unlawfully expropriated billions of dollars from taxpayers, conceded the illegitimacy of its actions, and developed a mandatory process as the sole avenue by which the agency would consider refunding its ill-gotten gains.