However, the federal court found, in the case United States v. Philadelphia Yearly Meeting of the Religious Society of Friends, that the Internal Revenue Service (IRS) cannot collect a 50% penalty from the religious group because Dalzell said he agreed with the Quakers’ argument that complying with the levy “substantially burdens its exercise of religion,” the Legal Intelligencer reported.
The Quakers say although they do not object to the federal income tax, and know that as employers they have a responsibility to withhold money from their employees, they have a duty to protect actions of their members, in this case, the actions of Quaker employee Priscilla Lippincott Adams, who was withholding her taxes in protest of the war. The Quakers asked the U.S. to find another way to collect the tax, without the imposition of a levy, thereby not requiring the Meeting itself to act as a tax collector, because it could not withdraw support for its member.
Dalzell said that under the Religious Freedom Restoration Act of 1993 (RFRA), the burden was on the government to “show that enforcement of the levy furthers a compelling interest by the least restrictive means,” according to the Legal Intelligencer. Dalzell agreed that the IRS had a compelling interest in finding an efficient way to collect back taxes, and a levy was such.
Although the Quakers’ lawyer, Peter Goldberger, contended that the IRS had a duty under RFRA to consider alternative means of collecting taxes from the protestor once it was shown that the levy on her wages would burden the Quaker’s exercise of religion, Dalzell disagreed, saying it would not be efficient for the IRS to do investigations or pursue other such methods.
Dalzell said that because the IRS had pursued an efficient and least restrictive path to gather back taxes, the employee’s refusal to comply with IRS actions made her liable for her back taxes, But he did side with Goldberger in ruling that the Quakers were not liable for a 50% penalty, as the IRS said.
The employee in question pursued her own RFPA challenge to the tax code, Adams v. CIR, the Legal Intelligencer said, in which she argued that uniform and mandatory participation in the federal income tax system is not least restrictive means of advancing the government’s compelling interest in collecting taxes, contending that the government could achieve its ends by another means in which it accommodated objectors, such as putting taxes towards non-military uses. This argument was rejected in 1999 by the U.S. 3rd Circuit Court of Appeals that said the tax code was the least restrictive means by which the government could achieve its goals.