Nonviolent Action Community of Cascadia's
Conscience & Military Tax Campaign
Escrow Account for Resisted War Taxes
Nonviolent Action Community of Cascadia
P.O. Box 85541
Seattle, WA 98145
(206) 547-0952, firstname.lastname@example.org, http://seanacc.org
This pamphlet is available online at http://seanacc.org/escrowaccount.htm
NACC’s Conscience and Military Tax Campaign (CMTC) Escrow Account
has worked since 1979 to assert U.S. taxpayers' rights of conscience. The account
helps to support those who refuse to pay for war and preparations for war, and
who wish for their taxes to be used only for peaceful, life-affirming purposes.
NACC maintains an office in Seattle; from which it administers the Escrow
Account; makes grants to local, national, and international community groups
from the interest accruing to the account; counsels War Tax Resisters and
prospective War Tax Resisters; conducts War Tax Resistance workshops;
responds to WTR inquiries from the media and the general public; and publishes
a biannual newsletter and WTR-related literature. NACC supports passage of the
Peace Tax Fund Bill through Congress, and is an affiliate of the National War
Tax Resistance Coordinating Committee (NWTRCC, http://nwtrcc.org/), and the
War Resisters League (WRL, http://warresisters.org/).
NACC's long-run goal is the redirection of Federal spending away from the
military and towards the meeting of human needs. War Tax Resistance is a
powerful form of nonviolent direct action towards this end. By withholding
federal taxes from the Pentagon, Resisters make strong individual and collective
statements that at some level of personal risk they refuse to pay for war.
What Is The CMTC Escrow Account?
The CMTC Escrow Account for refused military and war taxes is a program
that, since 1979, has allowed War Tax Resisters to set aside refused military
taxes. Depositors can retrieve their money at any time (for example, to replace
assets seized by the IRS). In the meantime, it is invested in community projects
around the country, and interest from the account is used to promote War Tax
Resistance and to support peace and social justice activism. The CMTC Escrow
Account is the largest and most geographically diverse Alternative Fund in the
U.S., holding hundreds of thousands of dollars from hundreds of depositors.
Who Should Consider Using The CMTC Escrow Account?
Many Resisters deposit the amount resisted – large, small, or in-between –
every year into the Escrow Account, knowing that it will then be available to
them should the IRS successfully levy their bank accounts or garnish their wages.
While the resisters would then required to pay interest and penalties out-of-
pocket, this amount can often be recovered through the War Tax Resisters
Penalty Fund (see below, “What Is The War Tax Resisters Penalty Fund?”). It's
worth noting that it may be many years before the IRS begins to attempt to collect
the resisted funds, and that its collection process is very costly – so that the act of
Resistance itself places a burden upon the IRS. There is a not-inconsiderable
possibility (especially for those choosing to resist small and/or symbolic amounts;
such as the Federal Excise Tax from their telephone bills, $10.40, or a percentage
of taxes owed) that the IRS will never get around to collecting the resisted funds
(see below, “What Are The Current IRS Collection Activity Trends?”). One, of
course, shouldn't assume that this will prove to be true in their own individual
The account is quite useful for those
willing to go to great lengths to prevent the
IRS from collecting. “Hiding” all of one's
assets in the account (and/or in similar
Alternative Funds or foreign banks), being
self-employed or willing to change jobs at a
moment's notice, not owning major assets
such as houses or cars, and being willing to
forego interest from one's assets can make it
exceedingly difficult, if not impossible, for
the IRS to collect. Note that this level of
WTR often requires lifestyle changes and
incon-venience on the part of the Resister.
But many resisters feel that the
inconvenience is preferable to the alternative:
granting tacit consent to the United States'
depraved military adventurism and budgeting priorities by helping to provide the
requisite financial support allowing the State to enact such policies. NACC is
happy to help those willing to take these steps to think through their options.
Non-Resisters wishing to support community funding and Peace & Justice
activities are welcomed to deposit any portion of their savings in the account. All
funds are held in socially responsible lending institutions and credit unions
throughout the United States, so the money is immediately put to good use
assisting low-income and minority commun-ities. Approximately 70% of the
interest from the account is granted annually to local, national, and international
grassroots organizations working for peace and against war.
For a general discussion of WTR philosophy, methods, and strategies
(including methods to prevent taxes from being withheld from one's paycheck),
see the NACC pamphlet “War Tax Resistance: How To Stop Paying For
Militarism” (available http://seanacc.org/wtr-fly.htm, or from the NACC office);
the War Resisters League's excellent book War Tax Resistance: A Guide To
Withholding Your Support From The Military (most recently updated in 2003,
and available from the WRL at http://warresisters.org/wtr_guide2003.htm, or for
$15 from the NACC office); or the National War Tax Resistance Coordinating
Committee's “Practical War Tax Resistance” series of publications (available
from the NACC office, or from the ever-resourceful NWTRCC website, at http://
Is The CMTC Escrow Account Legal?
The CMTC Escrow Account is a trust fund, and
as such it is entirely legal to make a deposit into the
account. However, refusing to pay one's taxes is
considered illegal by the IRS and by United States
courts, and is therefore currently an act of civil
disobedience. Proving to the IRS that one has not
kept the taxes for oneself, but is instead holding
them “in trust” in the CMTC Escrow Account until
such time as Federal budgeting priorities are
brought into line with one's conscience, does not in
the IRS' eyes remove one's tax liability or nullify
one's violation of the IRS code in failing to pay.
Despite the fact that the Nuremberg Principles (a part of what is commonly
referred to as International Law, which in theory supersedes U.S. domestic law)
instruct citizens to “disobey directives of state” which would render them
complicit in the commission of “crimes against peace, war crimes, and crimes
against humanity”, U.S. courts have consistently denied these and similar
arguments as defenses in cases involving War Tax Resistance.
Similarly, the U.S. Constitution forbids Congress to pass any law against
individual conscience, but no accommodation for taxpayers to avoid paying for
war against their consciences has yet been passed or held up as a defense in court.
Passage of the Peace Tax Fund Bill would preserve and guarantee the legal right
of conscience in regard to taxes, equivalent to the legally recognized right to
apply for Conscientious Objector status and thus avoid direct participation in war.
See http://www.peacetaxfund.org/ for information regarding the Peace Tax Fund
So, the Escrow Account is legal but War Tax Resistance is not. Thousands
of people feel that the potential risks (see below, “What Is The IRS Likely To
Do...”) are a necessary component of helping to build a more peaceful world.
Will I Go To Jail If I Use The CMTC Escrow Account?
You cannot be punished, fined, or jailed for making deposits into the CMTC
Escrow Account. Refusing to pay taxes to the IRS is, however, an act of Civil
Disobedience, which carries legal risks. While it is very common for people
exposed to the idea of War Tax Resistance to assume that they would be sent to
jail for refusing to pay Federal Income Taxes, it is in fact very rare for the IRS to
use the courts and threat of jail to force payment or punish a War Tax Resister.
Since 1948 only sixteen War Tax Resisters have been jailed. These Resisters
were not jailed for refusing to pay, but for related reasons (such as contempt of
court for refusing to produce records, claiming excessive allowances on W-4 or
1040 forms, or failure to file returns).
Generally speaking, the IRS has been much more interested in collecting the
money than in punishment by jail sentences – although of course this predilection
could change. Currently the chances of criminal prosecution are slim. Much more
likely are civil penalties and interest, which can over the years add up to more
than the original amount of taxes withheld. The magnitude of penalties and
interest imposed vary from year to year. Consult with a WTR counselor for
details of potential civil and criminal penalties. It helps to have a thorough
understanding of the possible consequences of your actions before undertaking
Tax Resistance activities.
Where Is The Money Held?
As noted above, deposits are held in fully insured, socially constructive
credit unions and savings and loans around the country, meeting the needs of
low-income and minority communities. The deposits are held in NACC’s name,
rather than in the names of individual depositors.
The interest on deposits is used in two
ways: About seventy percent of it is granted to
community organizations that strive to meet
human needs and work for social justice; and the
rest is used by NACC to maintain its office,
produce its newsletter, and fund its operations.
For an overview of NACC's most recent grant
recipients, see http://seanacc.org/#awarded.
If Congress passes the Peace Tax Fund
Bill, it is the intent of NACC, in consultation
with depositors, to give that portion of the funds
comprised of resisted Federal Taxes to the U.S.
Treasury to help start the Peace Tax Fund with.
Can I Get My Money Back?
Yes! You can withdraw your
money at any time. Make your request
in writing, and NACC will return the
amount requested, usually within two
weeks. In an emergency, arrangements
can be made to return the money more
Will The IRS Know About
My Deposits Into The Escrow
Deposits into the Account are
confidential. The pooled funds are held
in NACC’s name, rather than in the
names of individual depositors. Some
do choose to tell the IRS that they have
deposited their withheld taxes in the
CMTC Escrow Account (making a levy on those funds more likely). If you don't
tell the IRS about your deposits, it will not know about them. The IRS could,
theoretically, trace the deposits through one's bank – but this would be costly to
the IRS, and isn't very likely (and wouldn't be possible at all for deposits made
with personal money orders). It's also possible that the IRS could physically seize
NACC's records (and/or those of other Alternative Funds), and thereby learn the
details of the Account's depositors. But here again, this would be an expensive
undertaking, and likely generate an enormous amount of negative publicity,
probably making it more trouble that it would be worth. It may be worth noting
that such actions were never undertaken during the Reagan era – a time of similar
What Is The IRS Likely To Do If l Deposit Resisted Taxes
Into The CMTC Escrow Account?
While some Resisters have never been contacted by the IRS, anybody
engaging in WTR – whether or not the resisted funds are deposited with CMTC
or any other alternative fund – should expect to be contacted by the IRS once or
numerous times regarding the “delinquent” account. Even those engaging in
symbolic WTR have been harassed by the IRS. The more information the IRS has
about you and your tax obligations, the more likely it is to contact you.
Eventually, it may attempt to collect the amount it assesses as due, plus penalties
and interest. It collects through levying your bank account, garnishing wages or
salary, or seizing property (usually in that order).
Before collection efforts
begin you will receive a "Final
Notice Before Levy", thirty days
after which the IRS is legally
entitled to collect. NACC
encourages you to consult with a
WTR counselor and other Resist-
ers so as to think through your
options and priorities before you
get to this point, so that you'll be
able to act with clarity when the
IRS comes knocking. There is no
one correct way to react. Some
people pay their taxes under
protest at this point, some hold
out for long periods and then pay,
some allow their funds to be seized (and, often, continue to practice WTR even
after multiple seizures of funds), and some are able to prevent all collection
efforts. Each of these is a viable course of action, and it really helps to think your
decisions through in advance and to prepare yourself.
For more information regarding the IRS collections process, contact the
NACC office, or see NWTRCC's “Practical War Tax Resistance #3: How To
Resist Collection, Or Make The Most Of Collection When It Occurs” (available
from the NACC office, or online at http://nwtrcc.org/publications.htm#practical).
What Is The War Tax Resisters Penalty Fund?
The War Tax Resisters Penalty fund was established in 1982 to help
Resisters recover interest and penalties paid out to the IRS (whether voluntarily
or through collection). It works by dividing the total national interest-and-
penalties burden among all those persons who've volunteered to support the fund
(there are currently more than 800 supporters), each of whom generally end up
paying less than $20 per year. For more information, consult the Penalty Fund's
website, at http://www.nonviolence.org/issues/wtrpf/.
What Are The Recent IRS Collection Activity Trends?
Since 1980, the number of delinquent accounts has risen from about 2.7%
of all individual returns filed to about 6.9% for Fiscal Year 2004: about 9 million
delinquent accounts compared with about 131.3 million individual returns filed.
(It's not known how many of these delinquent accounts are of War Tax Resisters
– it's estimated that many thousands of people currently undertake WTR of some
form.) Of those nine million, about two-thirds are for “returns filed with
additional tax due”, and about one-third for “returns not filed timely”. While the
number of levies and property seizures dropped precipitously from 1995 to 2001,
they have since been on the rise again (this jibes with anecdotal evidence that the
IRS may be increasing the frequency of its levies of War Tax Resisters' bank
accounts and wages). Despite this trend, it remains the case that seizures of
property are extremely rare (440 for FY 2004), and levies are fairly uncommon
when measured against the total number of delinquent accounts (about two
million levies in FY 2004) – again, note that this applies to all delinquent
accounts, not merely those of War Tax Resisters. Incidentally, the IRS appears to
be much more successful collecting from those who choose to file than from
those who choose not to, collecting in FY 2004 about 42% of outstanding funds
from the former, and about 16% of assessed outstanding funds from the latter. For
more statistics, log on to http://www.irs.gov/taxstats/ (then click on “Products,
Publications, and Papers”, and then “IRS Data Books” under the “Publications”
Can The IRS Levy The Money I deposit In The CMTC
Yes, the IRS can levy the
money you deposit in the
CMTC Escrow Account, but
this has happened very rarely
and NACC has not received a
levy from the IRS since 1988.
If you do not inform the IRS
of your deposits in the Esc-
row Account, a levy is highly
unlikely. If a levy is made,
NACC will act in accordance with the wishes of the depositor in question. The
account has, in fact, never turned any money over to the IRS. In a December 1986
suit by the Justice Department against CMTC, adjudicated in Federal District
Court in New York, the CMTC Escrow Account was penalized $1,501 for not
turning over the money held for a depositor. This penalty has never been
collected. NACC has established the Conscience Penalty Fund to cover losses in
the event of an IRS seizure for the penalty assessed in 1986 (should it ever be
collected) or any penalties which may be assessed at some time in the future.
Depositors are free to support the Conscience Penalty Fund or not.
What Is The Conscience Penalty Fund?
NACC has established the Conscience Penalty Fund to cover losses
incurred by individuals refusing to cooperate with IRS levies on their deposits in
the Escrow Account. It will go into effect only if an IRS seizure occurs against
CMTC (in other words, levies against depositors' funds not held in the account
would not be eligible). Escrow Account depositors and other supporters finance it
on a volunteer basis. Escrow Account depositors are asked in the Escrow Account
Agreement (included on the last page of this pamphlet) whether they would like
to help support fellow depositors by allowing CMTC to remove 3% or $15
(whichever is less) from their account once per year in the event of an IRS seizure
of CMTC Escrow Account funds. This money would be used to mitigate the
Resister's loss. Such community solidarity activity enjoys a rich history in the
WTR movement (though, as noted, the CMTC has never turned any money over
to the IRS).
What Types Of Help And Support Can I Expect From
The NACC office will gladly provide information, literature, counseling,
local contacts, referrals, and ideas for organizing. War Tax Resisters sometimes
feel isolated and frightened, so support is very important. We encourage you to
join or form a local support group. NACC can help with this process.
Can I At Some Point Convert Escrow Account Deposits Into
Donations To NACC?
Yes! If you decide to donate Escrow Account deposits to NACC (for
example, if the statute of limitations for IRS collection has run out, and you won't
be needing the money), let us know (in writing) the amount and we'll convert the
deposit into a donation.
How Do I Make My First Deposit?
Deposits and withdrawals are usually made by mail. We will send you a
receipt/balance-slip after every deposit and withdrawal, and an annual statement
to check that our information is correct. When sending deposits, please make sure
to make them payable to the CMTC Escrow Account rather than to NACC.
You can make your first deposit by filling out and signing the Escrow
Account Agreement on the last page of this pamphlet (the form can also be
printed out from http://seanacc.org/form.htm), detaching the page, and mailing it
together with your check or money order, made out for any amount, to:
P.O. Box 85541
Seattle, WA 98145
War Tax Resistance Resources
• The Conscience and Military Tax Campaign Escrow Account The nation's
largest fund of resisted War Taxes. For more information, see the NACC flyer
“Conscience & Military Tax Campaign Escrow Account for Resisted War Taxes”.
Copies are available from the NACC office, as well as from the NACC website, at
• Counseling, Workshops, Literature, and other information to support War Tax
Resisters and their allies. Get in touch with the NACC office to set up a presentation
for your organization or group of friends, to speak with a WTR counselor, or with
any questions regarding Tax Resistance or the CMTC Escrow Account.
• An annual Grant Cycle, allocating most of the interest generated by the CMTC
Escrow account to local, national, and international Peace & Justice organizations.
To be added to the notifications list for upcoming dates of significance regarding the
next grant cycle, pass your e-mail address along to the NACC office. For a list of the
most recent recipients, log on to http://seanacc.org/#awarded.
• The National War Tax Resistance Coordinating Committee, a national coalition
of local War Tax Resistance organizations; with a very helpful full-time staffperson,
excellent literature, a newsletter, and a national contacts and counselors list.
NWTRCC, P.O. Box 150553, Brooklyn, NY 11215; (800) 269-7464;
• The War Resisters League in New York City recently celebrated its 75th
anniversary. The WRL publishes War Tax Resistance: A Guide to Withholding Your
Support from the Military, a highly recommended, 130-page basic War Tax
Resistance handbook (available for $15 from the NACC office, or online at
http://warresisters.org/wtr_guide2003.htm), as well as the annual “Where Your
Income Tax Money Really Goes” pie-chart leaflet (see the online version of the pie-
chart at http://warresisters.org/piechart.htm). War Resisters League, 339 Lafayette
St., New York, NY 10012; (212) 228-0450; email@example.com, http://warresisters.org.
• The War Tax Resisters Penalty Fund. Established in 1982 to spread out among
the entire WTR community the costs of penalties and interest imposed by the IRS.
Each member of the fund generally ends up paying less than $20 per year. WTRPF,
P.O. Box 25, North Manchester, IN 46962; (260) 982-2971;
• The National Campaign for a Peace Tax Fund is attempting to pass a bill through
Congress allowing Conscientious Objectors to pay taxes only for non-military
purposes National Campaign for a Peace Tax Fund and the Peace Tax Foundation,
2121 Decatur Place NW, Washington, DC 20008; (202) 483-3751; (888) PEACE-
TAX; firstname.lastname@example.org; http://www.peacetaxfund.org/.
CMTC Escrow Account Agreement
Yes! I enclose my first deposit into the CMTC Escrow Account. (Please make
check payable to “CMTC Escrow Account”.)
I understand and affirm the following conditions for my deposits into the CMTC
• I am a conscientious objector/resister to military taxation who wishes to pay
any federal taxes and/or use my personal savings only for humanitarian,
nonviolent, and life-affirming purposes.
• Interest earned on my deposits will be used by NACC to promote War Tax
Resistance and support human needs and social justice.
• Deposits by individuals who die and leave no instructions or individuals
who move and leave no forwarding address (and from whom we do not hear
and are unable to contact in five years) shall belong to NACC.
• Deposits are FDIC insured, and withdrawals from the Escrow Account can
be made on request (in writing), usually within two weeks.
Please check one of the following:
__ I wish to support the Conscience Penalty Fund. In the event of IRS seizures of
CMTC funds as a result of non-cooperation with levies on individuals' deposits, I
authorize CMTC to remove $15 or 3% (whichever is less) from my/our account
as needed, but no more than once in a year, and deposit this amount in the
Conscience Penalty Fund.
__ I do not wish to support the Conscience Penalty Fund.
Nonviolent Action Community of Cascadia
P.O. Box 85541
Seattle, WA 98145
(206) 547-0952, email@example.com, http://seanacc.org