(Author’s note: The article has been updated to include a statement from the Attorney General’s Office of the State of Indiana.)
Religious freedom is not a valid defense for tax evasion. That was effectively the ruling out of the Supreme Court of Indiana when it unanimously refused to hear an appeal from Rodney Tyms-Bey, who argued that the state’s Religious Freedom Restoration Act (RFRA) protected him from paying his taxes.
According to court records, Tyms-Bey was arrested in August of 2014 and charged with three counts of felony tax evasion. Specifically, Tyms-Bey was accused of falsely reporting his income and eligible tax deductions for the tax year 2012.
As a defense, Tyms-Bey argued that he could not be found guilty because of a clause in Indiana’s RFRA that prohibits state laws that stand in the way of a person’s ability to follow his or her religious beliefs. Specifically, the Act says, at Section 9:
A person whose exercise of religion has been substantially burdened, or is likely to be substantially burdened, by a violation of this chapter may assert the violation or impending violation as a claim or defense in a judicial or administrative proceeding, regardless of whether the state or any other governmental entity is a party to the proceeding.
That language does not appear in the federal version of the bill.
Attempts to use religion as a defense to paying federal taxes have not traditionally been successful. In the often cited case of U.S. v. Lee (455 U.S. 252 (1982)), the court found that “not all burdens on religion are unconstitutional.” The court went on to say that “The state may justify a limitation on religious liberty by showing that it is essential to accomplish an overriding governmental interest.”
In this case, Tyms-Bey argued that paying state taxes would be a burden on his religious beliefs. Prosecutors responded that the act of paying taxes does not interfere with religious beliefs. They also noted that Tyms-Bey has never identified his religion; documents filed with the court indicate that “he is a sovereign citizen.” Sovereign citizens are not considered an established religious group but rather a “loose network of individuals” according to the Federal Bureau of Investigation (FBI) which has declared that members “should be approached with knowledge and caution.” The Internal Revenue Service (IRS) has long established the declaration of a person as a sovereign citizen not subject to tax as a “frivolous position.”
This latest court action does not end matters for Tyms-Bey as the underlying criminal case has not been concluded. Procedurally, Tyms-Bey is more or less back where he started. Through his lawyer, Matthew Gerber, Tyms-Bey filed a Notice of Defense of Religious Freedom on July 1, 2015, the day the Indiana RFRA went into effect. The state filed a motion to strike and the trial court agreed. However, Gerber subsequently filed – and was granted – an interlocutory appeal on behalf of Tyms-Bey. An interlocutory appeal is filed when there is a question that must be answered by another court before the matter moves forward: in this case, the question of whether the state’s RFRA applied was central to Tyms-Bey’s defense at trial.
Victoria Bailey, another lawyer for Tyms-Bey filed a Petition for Rehearing in the Appellate Court as well as a Petition to Transfer to the Supreme Court in order to bring the RFRA at trial. In the latter, she agrees that in the future, “we may be able to look back and find that, in fact, no one charged with tax evasion ever did succeed with a RFRA defense.” However, she argues, “[b]ut the plain, unambiguous language of RFRA requires that they be given the chance to try.” The court did not agree (IN THE INDIANA SUPREME COURT NO. 49A05-1603-CR-439).
A request for comment from Ms. Bailey was not returned. However, Corey Elliot, Press Secretary for the Attorney General for the State of Indiana, offered the following statement in response:
We expected the Indiana Supreme Court’s choice not to review the Tyms-Bey case, as the Court of Appeals correctly followed the decisions of the United States Supreme Court and other courts around the country in recognizing that income tax laws must be followed by everyone as a responsibility of citizenship. This is because RFRA laws are plainly not aimed at letting tax cheats escape their tax obligations. We note that Tyms-Bey has only been charged with having committed a crime, has not been convicted, and is presumed innocent until found guilty. RFRA arguments are rare, and so while we don’t expect to see a lot of them, we stand ready to explain to Indiana’s appellate courts how the law properly applies in the unique circumstances of each every individual case.
The matter now moves back to a lower court. According to the docket, a pretrial conference on the matter is scheduled for July 18, 2017.
