The Racial Reparations non Entitlement
By: Bill E. Branscum
Copyrights 2000, 2001 & 2002

Proponents of this contention assert that African Americans can claim a socalled “Black Tax Credit” on their federal income tax returns as reparations for slavery and other oppressive treatment suffered by African Americans. A similar frivolous argument has been made that Native Americans are entitled to a credit on their federal income tax returns as a form of reparations for past oppressive treatment.

The Law: There is no provision in the Internal Revenue Code which allows taxpayers to claim a “Black Tax Credit” or a credit for Native American reparations. It is a well settled principle of law that deductions and credits are a matter of legislative grace.

See e.g., Wilson v. Commissioner, T.C. Memo. 2001-139, 81 T.C.M. (CCH) 1745 (2001). Unless specifically provided for in the Internal Revenue Code, no deduction or credit may be allowed.

The IRS indicated in News Release IR-2002-08, 2002 I.R.B. LEXIS 30, that it will crack down on promoters of “slavery reparation tax credit” and “Native American reparations“ scams. See 2002 TNT 17-15 (January 24, 2002).

Further, according to the News Release, the IRS will implement a new policy under which these reparation claims will be treated as a frivolous tax return which could result in a potential $500 penalty. Id.

Furthermore, section 7408 provides a cause of action for injunctive relief to the United States against a party suspected of violating the tax laws. On March 6, 2002, the United States filed civil suits to enjoin two tax return preparers (Andrew L. Wiley and Robert L. Foster) from preparing federal income tax returns claiming refunds based on a non-existent tax credit for slavery reparations. United States v. Wiley, No. 3:02-cv-209WS (S.D. Miss. 2002); United States v. Foster, No. 3:02-cv-133 (E.D. Va. 2002).

Other Relevant Case Law:

United States v. Bridges, 86 A.F.T.R.2d (RIA) 5280 (4th Cir. 2000) – the court upheld Bridges’ conviction of aiding and assisting the preparation of false tax returns, on which he claimed a non-existent “Black Tax Credit.”

I welcome your comments, questions and suggestions.

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