Daniel T. Arthurs’ “Reliance” on Benson (1986)
By: Bill E. Branscum
Copyrights 2003

In October 1983, Daniel T. Arthur and his wife, Theresa L. Arthur, filed amended Arizona state tax returns for the years 1980 and 1981 requesting refunds on the ground that they "mistakenly included as income a source of income, rather than income from that source." The Department of Revenue approved their request and refunded $ 1,164.73 for their 1980 personal income taxes and $ 1,349.60 for their 1981 personal income taxes.

In May 1984, the Department of Revenue filed a Complaint against the Arthur’s alleging that they filed tax returns containing false information. The Department sought recovery of the amounts refunded to the Arthurs and a penalty of $ 1,000 per tax return containing false information.

Upon motion for summary judgment, the court granted the Department its requested relief and awarded attorneys' fees. Daniel Arthur filed an appeal alleging, inter alia, that the Sixteenth Amendment to the United States Constitution was never validly ratified.

The published Opinion in Case No. CA-CIV 8546, Department Of Revenue, Plaintiff-Appellee, v. Daniel T. Arthur, Defendant-Appellant, reported as 153 Ariz. 1; 734 P.2d 98; 1986 Ariz. App. Lexis 718, is appended to this report as Exhibit. In affirming the trial court’s Summary Judgment, the Arizona Court of Appeals said:

"Arthur argues that the Internal Revenue Code, 26 U.S.C. § 1 et seq., is invalid because the sixteenth amendment to the United States Constitution which authorizes the imposition of personal income taxes was not lawfully ratified.

Arthur's argument that the sixteenth amendment was not lawfully ratified is based upon an alleged fraudulent scheme between then Secretary of State Philander Knox and his Solicitor of the Department of State in certifying ratification of the Sixteenth Amendment on February 25, 1913

As documentation of these fraudulent activities, Arthur submitted to the court a copy of The Law That Never Was (1985), written by Bill Bensen and M.J. "Red" Beckman, and three spiral-bound volumes of supporting documents.

Questions concerning the validity of constitutional amendments and compliance with the requirements of article V of the United States Constitution are within the sole province of Congress, not the courts.

In Leser v. Garnett, the United States Supreme Court held that the validity of the ratification of the nineteenth amendment was a nonjusticiable issue. Such issues are considered "political questions" and are not justiciable. Wojtas, id.; United States v. Thomas, 611 F.Supp. 881 (N.D.Ill.1985).

The question before us today has been decided in United States v. Wojtas, supra. In that case, the court held that the issue of whether the Secretary of State committed fraud in certifying adoption of the sixteenth amendment raised a political question within the exclusive power of Congress to determine. Accordingly, we do not review the validity of the ratification of the sixteenth amendment on the ground that it is a political question that is more appropriately addressed by Congress."

With regard to the Trial Courts award of attorney’s fees to be taxed against Arthur, the Appellate Court ruled:

" Arthur raises several issues that are not novel, but are, in our opinion, frivolous -- for example, the claim that the sixteenth amendment is invalid. The core issues in this case are frivolous. We affirm the trial court's award of attorneys' fees.

With regard to the Department of Revenue’s petition for attorney’s fees related to the appeal, the Appellate Court ruled:

The record is clear and convincing that this appeal is frivolous. We award the Department attorneys' fees on appeal."

Rather than expect your Clients to accept your word for it, you can let them read the Decision and Order for themselves. See Exhibit.

I welcome your comments, questions and suggestions.

© Copyright 2002 - Bill E. Branscum. All Rights Reserved.