                                                                                                                           Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-4-1999

Adams Lippincott v. Comm IRS
Precedential or Non-Precedential:

Docket 98-7200




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Filed March 4, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 98-7200

PRISCILLA M. LIPPINCOTT ADAMS,
       Appellant

v.

COMMISSIONER OF INTERNAL REVENUE

ON APPEAL FROM THE
UNITED STATES TAX COURT
(Docket Nos. 96-15535 and 97-3437)
Tax Court Judge: Honorable Maurice B. Foley

Argued January 14, 1999

Before: GREENBERG and RENDELL, Circuit Judges,
and DEBEVOISE, District Judge*

(Filed: March 4, 1999)

Peter Goldberger, Esquire (Argued)
James H. Feldman, Jr., Esquire
50 Rittenhouse Place
Ardmore, PA 19003
 Attorneys for Appellant



_________________________________________________________________

*Honorable Dickinson Debevoise, United States Senior District Court
Judge for the District of New Jersey, sitting by designation.
       Loretta C. Argrett, Esquire
       Assistant Attorney General
       Michelle B. O'Connor, Esquire
        (Argued)
       Gilbert S. Rothenberg, Esquire
       Tax Division, Department of Justice
       P.O. Box 502
       Washington, DC 20044
        Attorneys for Appellee

OPINION OF THE COURT

RENDELL, Circuit Judge.

Priscilla Adams claims that Religious Freedom
Restoration Act ("RFRA") requires accommodation of her
religious beliefs so that her tax payments do not fund the
military. She also argues that RFRA and the free exercise
clause mandate a finding that her religious beliefs
constitute "reasonable cause" under 26 U.S.C. S 6651 for
her failure to file returns or pay tax and an"unusual
circumstance" which makes it "against equity and good
conscience" for the Commissioner to impose the penalty for
failure to estimate under 26 U.S.C. S 6654.

I. Factual and Procedural History

The facts are not in dispute. Adams is a devout Quaker;
she currently works as a "Peace Field Secretary" for the
Philadelphia Yearly Meeting of the Religious Society of
Friends. She sincerely believes that participation in war is
contrary to God's will, and hence, that the payment of taxes
to fund the military is against the will of God. From 1985
to 1989, Adams declared herself exempt from taxation, so
no federal income tax would be withheld from her pay. In
1989, the IRS sent a letter to her employer, the
Philadelphia Yearly Meeting, directing it to withhold taxes
from her salary as if she were married and claiming one
withholding allowance.

Adams has taken pains to ensure that she does not profit
from her tax protests and to demonstrate that her beliefs

                                2
regarding refusal to pay taxes are sincere and are the result
of being called or directed by God, in that she has been
tested and challenged by "clearness committees" of
members of her Meeting that have been convened to
examine her beliefs on this topic. They have determined
that the course of her conduct is the result of a"leading"
from God. She asserts that she would voluntarily pay all of
her federal income taxes if the money she paid were
directed to a fund that supported only non-military
spending, or if her payments could be directed to non-
military expenditures, or that, with the consultation of a
clearness committee, she would be willing to consider any
other form of accommodation of her beliefs that could be
offered by the government.

The Commissioner assessed deficiencies and penalties
against Adams for the years 1988, 1989, 1992, 1993, and
1994. The Tax Court determined that Adams was not
exempt from the payment of taxes under RFRA and was
liable for the deficiencies and penalties assessed against
her, relying on United States v. Lee, 455 U.S. 252 (1982),
and other case law preceding Employment Division v. Smith,
494 U.S. 872 (1990). Adams now appeals to this court. We
have jurisdiction pursuant to 26 U.S.C. S 7482(a) (1994).
Our review is plenary, as all of the issues raised are
matters of law. See Geisinger Health Plan v. Commissioner,
30 F.3d 494, 498 (3d Cir. 1994); Lazore v. Commissioner,
11 F.3d 1180, 1182 (3d Cir. 1993).

II. Discussion

A. RFRA Claim

The parties do not contest the constitutionality or the
applicability of RFRA to the case at hand. They agree that
RFRA applies to the federal government, as Boerne v.
Flores, 117 S. Ct. 2157 (1997), held only that RFRA was
unconstitutional as applied to the states under section 5 of
the Fourteenth Amendment. For the purposes of this
appeal, we assume without deciding that RFRA is

                                3
constitutional as applied to the federal government. See
Alamo v. Clay, 137 F.3d 1366, 1367 (D.C. Cir. 1998).1

RFRA provides:

       (a) In general

       Government shall not substantially burden a person's
       exercise of religion even if the burden results from a
       rule of general applicability, except as provided in
       subsection (b) of this section.

       (b) Exception

       Government may substantially burden a person's
       exercise of religion only if it demonstrates that
       application of the burden to the person --

       (1) is in furtherance of a compelling governmental
       interest; and

       (2) is the least restrictive means of furthering that
       compelling governmental interest.
_________________________________________________________________

1. In general, courts that have addressed the question of
constitutionality have found that RFRA is constitutional as applied to the
federal government. See In re Young, 141 F.3d 854 (8th Cir.), cert.
denied, 119 S. Ct. 43 (1998); see also EEOC v. Catholic Univ. of America,
83 F.3d 455, 468-70 (D.C. Cir. 1996) (finding RFRA constitutional as
applied to Title VII, but relying on Fifth Circuit's decision in Boerne);
but
see Boerne, 117 S. Ct. at 2171 (Stevens, concurring, questioning
Establishment Clause implications of RFRA); 141 F.3d at 862-68 (Bogue,
dissenting); United States v. Grant, 117 F.3d 788, 792 n.6 (5th Cir. 1997)
(questioning RFRA's viability in the federal context); In re Gates, 212
B.R.
220 (Bankr. W.D.N.Y. 1997) (finding that Boerne overruled RFRA
altogether). Some commentators have noted that RFRA may be
unconstitutional as applied to federal law. See Marci Hamilton, The
Religious Freedom Restoration Act is Unconstitutional, Period, 1 U. Pa. J.
Const. L. 1 (1998); Aurora R. Bearse, Note, RFRA: Is it Necessary? Is it
Proper?, 50 Rutgers L. Rev. 1045 (1998); Edward J.W. Blatnik, Note, No
RFRAF Allowed: The Status of the Religious Freedom Restoration Act's
Federal Application in the Wake of City of Boerne v. Flores, 98 Colum. L.
Rev. 1410 (1998); but see Thomas C. Berg, The Constitutional Future of
Religious Freedom Legislation, 20 U. Ark. Little Rock L.J. 715 (1998)
(arguing that RFRA is constitutional as applied to the federal
government).

                               4
Adams argues that under RFRA, she is exempt from
federal income tax for the years in which she has been
assessed a deficiency, because requiring her to pay these
taxes substantially burdens her religious beliefs. She
concedes that the government has a compelling interest in
the collection of taxes, but contends that the IRS failed to
meet its burden under RFRA of proving that it could not
accommodate her, that is, that there is no less restrictive
means of furthering the government's interest. She argues
that this failure of proof requires this court to reverse the
Tax Court and find that Adams owes no taxes for the years
in question, and that she is not required to pay income
taxes so long as the Commissioner does not act to
accommodate her objections. Adams contends that she is
not asking to be exempted from the payment of taxes
altogether, but that she wants her beliefs to be
"accommodated," because RFRA requires that the IRS
accommodate her objection, unless the refusal to do so is
the "least restrictive means" for achieving the government's
compelling interest in tax collection. The Commissioner
accepts Adams's acknowledgment that the government has
a compelling interest in the collection of taxes, and urges
us to find that the current system -- uniform and
mandatory in nature -- is the least restrictive means of
furthering that interest.

There is little doubt that RFRA was enacted as a direct
response to Employment Division v. Smith, and to restore
the tests that were routinely employed before the Supreme
Court's ruling that neutral, generally applicable laws may
impinge on religious practices, even in the absence of a
compelling state interest. See 494 U.S. at 882-84; Boerne,
117 S. Ct. at 2161. RFRA requires courts to employ the test
set forth above in the statutory language. First, the
claimant must demonstrate a "substantial burden" on her
exercise of her religious beliefs. If she does so, the burden
shifts to the government to demonstrate that the regulation
or practice at issue furthers a "compelling interest," and
that it furthers that interest by the "least restrictive
means." See S 2000bb-1; Small v. Lehman, 98 F.3d 762,
767 (3d Cir. 1996), overruled by 117 S. Ct. 2157 (1997).2
_________________________________________________________________

2. Small was overruled by Boerne. However, we use this case and other
cases applying RFRA to state institutions and laws as a guide to how we
should interpret the statute, although we realize we are not bound by
their dictates.

                               5
In enacting RFRA, Congress specifically announced its
intent to "restore" the "compelling interest" test set forth in
Sherbert v. Verner and Wisconsin v. Yoder:

       The purposes of this chapter are --

       (1) to restore the compelling interest test as set forth in
       Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin
       v. Yoder, 406 U.S. 205 (1972) and to guarantee its
       application in all cases where free exercise of religion is
       substantially burdened; and

       (2) to provide a claim or defense to persons whose
       religious exercise is substantially burdened by the
       government.

       S 2000bb(b).

However, Congress's intent with regard to the precise
contours of the elements of the RFRA test is a somewhat
different matter, as neither the statutory provisions, the
legislative history, nor the floor debates indicate exactly
how the elements of the test are defined, or are defined in
relation to the pre-Smith case law. See S 2000bb(a);
S 2000bb-2; S. Rep. No. 103-111 (1993), at 5-9, 15-16,
reprinted in 1993 U.S.C.C.A.N. 1893, 1894-98, 1904-05;
see also 139 Cong. Rec. S1415-01, S14515-16 (daily ed.
Oct. 27, 1993) (statements of Senator Chaffee); 139 Cong.
Rec. S14461-01, S14462, S14468, S14469 (daily ed. Oct.
26, 1993) (statements of Senators Feingold, Lieberman, and
Bradley); 139 Cong. Rec. S14350-01, S14350, S14353
(daily ed. Oct. 26, 1993) (statements of Senators Kennedy
and Hatch); 139 Cong. Rec. H2356-03, H2356-59, H2360-
61 (daily ed. May 11, 1993) (remarks of Representatives
Brooks Edwards, Fish, Hughes, and Schumer); The
Religious Freedom Restoration Act: Hearing on S. 2969
Before the Comm. on the Judiciary of the United States
Senate, 102nd Cong. 2, 129-35 (Sept. 18, 1992). While
prior cases touched on one or more of the aspects of the
RFRA test, these elements -- substantial burden,
compelling interest, least restrictive means -- did not
constitute a comprehensive standard, let alone a uniform or
established test, prior to Smith.3 The instant case presents
_________________________________________________________________

3. The Supreme Court stated in Boerne,"the Act imposes in every case
a least restrictive means requirement -- a requirement that was not used

                               6
the issue, as to whether, and if so, how, we should
construe RFRA in light of prior case law. The legislative
history of both the House and the Senate versions of RFRA
contain explicit indications that prior case law is central to
the understanding of the compelling interest test:

       The committee wishes to stress that the act does not
       express approval or disapproval of the result reached
       in any particular court decision involving the free
       exercise of religion, including those cited in the act
       itself. This bill is not a codification of the result
       reached in any prior free exercise decision but rather
       the restoration of the legal standard that was applied
       in those decisions. Therefore, the compelling interest
       test generally should not be construed more stringently
       or more leniently than it was prior to Smith.

       S. Rep. No. 103-111 at 9; H.R. Rep. No. 103-88 at 21
       (1993).4
_________________________________________________________________

in the pre-Smith jurisprudence RFRA purported to codify." See 117 S. Ct.
at 2171. We note that this "element" has in fact appeared sporadically in
those terms or as a "narrowly tailored" requirement. See Smith, 494 U.S.
at 894-95 (O'Connor, concurring) (noting that in free exercise cases, "we
have respected both the First Amendment's express textual mandate that
the governmental interest in regulation of conduct by requiring the
government to justify any substantial burden on religiously motivated
conduct by a compelling state interest and by means narrowly tailored
to achieve that interest," citing Hernandez v. Commissioner, 490 U.S.
680, 699 (1989); Lee, 455 U.S. at 257-58, cited in S. Rep. 103-111 at 7;
see also Hobbie v. Unemployment Appeals Comm'n., 480 U.S. 136, 140-
42 (1987) (strict scrutiny applies to free exercise unemployment
compensation challenge); Thomas v. Review Bd., 450 U.S. 707, 718
(1981) ("The state may justify an inroad on religious liberty by showing
that it is the least restrictive means of achieving some compelling state
interest.")

4. The floor debates contain an extended "colloquy" between Senators
Grassley and Hatch that occurred during the Judiciary Committee
markup of the bill, which states in pertinent part:

Grassley: Does this bill change the way courts assess a "compelling state
interest"? Will it still be up to the judge -- who will look at all the
facts
in the case -- to say whether there is a compelling interest? In other
words, this bill does not purport to legislate a definition of compelling
interest, does it?

                               7
The legislative history accompanying the Senate bill also
includes the following directive: "The committee expects
that the courts will look to free exercise cases decided prior
to Smith for guidance in determining whether the exercise
of religion has been substantially burdened and the least
restrictive means have been employed in furthering a
compelling governmental interest." S. Rep. 103-111 at 8-9.5
Cases decided before Smith involving application of the
standards to the tax system, or to situations analogous to
the tax system are, therefore, instructive. In United States
v. Lee, the Supreme Court rejected a free exercise challenge
to the imposition of social security taxes based on the fact
that mandatory participation was necessary to the
functioning of the social security program, and that a
voluntary system would be impossible to administer. See
455 U.S. at 257-59. In so finding, the Court noted:

       Religious beliefs can be accommodated, see, e.g.,
       Thomas, supra; Sherbert, supra, but there is a point at
       which accommodation would "radically restrict the
       operating latitude of the legislature." . . . Unlike the
       situation presented in Wisconsin v. Yoder, supra, it
       would be difficult to accommodate the comprehensive
_________________________________________________________________

Hatch: RFRA reestablishes a very familiar and traditional standard of
review that the courts have been applying since the 1963 decision
Sherbert v. Verner. That is why we do not attempt to define the standard
in the bill. This bill does not dictate the proper result in a particular
free
exercise case nor does it identify specific governmental interests that
are
compelling. The courts will continue to determine whether burdens on
religious exercise are justified, based upon a consideration and weighing
of all relevant facts and circumstances. Historically, the courts have had
little difficulty identifying important governmental interests. For
example,
the courts have found eradication of racial discrimination to be a
compelling governmental interest.

139 Cong. Rec. S14461-01, S14470 (daily ed. Oct. 27, 1993).

5. In enacting RFRA, Congress seized upon language from Supreme
Court opinions to create a statutory cause of action. In determining the
bounds of Congressional intent in creating that statutory right we look
to Congress's statements about pre-Smith case law as instructive for our
purposes, namely, to "say what the law is." Marbury v. Madison, 1
Cranch 137, 177 (1803).

                               8
       social security system with myriad exceptions flowing
       from a wide variety of religious beliefs. The obligation
       to pay the social security tax initially is not
       fundamentally different from the obligation to pay
       income taxes; the difference -- in theory at least-- is
       that the social security tax revenues are segregated for
       use only in furtherance of the statutory program. There
       is no principled way, for purposes of this case, to
       distinguish between general taxes and those imposed
       under the Social Security Act. If, for example, a
       religious adherent believes war is a sin, and if a certain
       percentage of the federal budget can be identified as
       devoted to war-related activities, such individuals
       would have a similarly valid claim to be exempt from
       paying that percentage of the income tax. The tax
       system could not function if denominations were
       allowed to challenge the tax system because tax
       payments were spent in a manner that violates their
       religious belief. . . . Because the broad public interest
       in maintaining sound tax system is of such a high
       order, religious belief in conflict with the payment of
       taxes affords no basis for resisting the tax.

       455 U.S. at 259-60.

In Hernandez, members of the Church of Scientology raised
several challenges to the disallowance of claimed
exemptions for the monies they had paid for spiritual
training classes and sessions, including a free exercise
challenge. In upholding the disallowance of exemptions in
the face of their free exercise challenge, the Hernandez
court relied on Lee:

       [O]ur decision in Lee establishes that even a
       substantial burden would be justified by the "broad
       public interest in maintaining a sound tax system,"
       free of "myriad exceptions flowing from a wide variety
       of religious beliefs." 455 U.S. at 260. . . . That these
       cases involve federal income taxes, not the Social
       Security system, is of no consequence. Ibid. The fact
       that Congress has already crafted some deductions and
       exemptions in the Code also is of no consequence, for
       the guiding principle is that a tax "must be uniformly

                               9
       applicable to all, except as Congress provides explicitly
       otherwise." Id. at 261.

       490 U.S. at 699 (emphasis added in original).

Lee and Hernandez are both part of a line of cases that
have refused to recognize free exercise challenges to the
payment of taxes or penalties imposed due to a refusal to
pay taxes as a protest against the military activities of the
United States. See, e.g., Lull v. Commissioner, 602 F.2d
1166 (4th Cir. 1979) (per curiam); Graves v. Commissioner,
579 F.2d 392 (6th Cir. 1978); First v. Commissioner, 547
F.2d 45 (7th Cir. 1976) (per curiam); Autenreith v. Cullen,
418 F.2d 586 (9th Cir. 1969); see also Bethel Baptist
Church v. United States, 822 F.2d 1334 (3d Cir. 1987)
(social security taxes); Kahn v. United States , 753 F.2d
1208, 1215-16 (3d Cir. 1985); McLaughlin v. Commissioner,
832 F.2d 986 (7th Cir. 1987); Nelson v. United States, 796
F.2d 164 (6th Cir. 1986); McKee v. United States, 781 F.2d
1043 (4th Cir. 1985); Collett v. United States , 781 F.2d 53
(6th Cir. 1985) (per curiam); Jenney v. United States, 755
F.2d 1384 (9th Cir. 1985); Wall v. United States, 756 F.2d
52 (8th Cir. 1985); Welch v. United States, 750 F.2d 1101
(1st Cir. 1985); Ballinger v. Commissioner, 728 F.2d 1287
(10th Cir. 1984); cf. United States v. Malinowski, 472 F.2d
850 (3d Cir. 1973) (First Amendment an insufficient
defense to tax evasion).6

In the case before us, the Tax Court stated that the
"uniform, mandatory participation in the Federal income
tax system, irrespective of religious belief, is a compelling
governmental interest. . . . As a result, requiring petitioner's
participation in the Federal income tax system is the only,
and thus the least restrictive, means of furthering the
Government's interest." See Adams v. Commissioner, 110
T.C. 137, 139 (1998), citing Hernandez, 490 U.S. at 699-
700; Lee, 455 U.S. at 260. Adams argues that the tax court
misconstrued the compelling interest, and did so in so
_________________________________________________________________

6. In discussing instances in which the "compelling interest" test has
been used to uphold governmental practices, Congress cited cases
disallowing the availability of tax exemptions on the basis of religious
practice and belief, namely, Hernandez, Lee, and Bob Jones University v.
United States, 461 U.S. 574 (1983). See S. Rep. No. 103-111 at 5.

                               10
broad a manner, that the court did not address the "least
restrictive means" prong. She contends that the government
did not meet its burden in this regard. We disagree.

Mindful of the comments of both the House and Senate,
while we are not bound by the results in Lee and
Hernandez, we cannot help but be guided by their
reasoning in determining whether the least restrictive
means have been employed to further the government's
compelling interest. Viewing the requirements of RFRA
through the helpful lens of pre-Smith case law, we conclude
that the nature of the compelling interest involved-- as
characterized by the Supreme Court in Lee-- converts the
least restrictive means inquiry into a rhetorical question
that has been answered by the analysis in Lee. The least
restrictive means of furthering a compelling interest in the
collection of taxes -- a compelling interest that Adams has
conceded -- is in fact, to implement that system in a
uniform, mandatory way, with Congress determining in the
first instance if exemptions are to built into the legislative
scheme. The question of whether government could
implement a less restrictive means of income tax collection
surfaced in pre-Smith case law and was answered in the
negative based on the practical need of the government for
uniform administration of taxation, given particularly
difficult problems with administration should exceptions on
religious grounds be carved out by the courts. See Lee, 455
U.S. at 259-60. We acknowledge the sincerity of Adams's
beliefs, but as the Supreme Court noted in Lee, we can
easily imagine a plethora of other sects that would also
have an equally legitimate concern with the usage of tax
dollars to fund activities antithetical to their religion. See
455 U.S. at 259. We also note that the same concerns with
religious pluralism that prompted the passage of RFRA
have also prompted past courts' reluctance to become
involved in determining whether a claimant's beliefs are
"sincerely held," due to the multiplicity of beliefs in this
country; these concerns also fortify our resistance to court-
created exemptions to the income tax system. See Lee, 455
U.S. at 259; Lull, 602 F.2d at 1168-69; cf. Kahn, 753 F.2d
at 1214.

Our approach to this particular form of tax challenge
under RFRA is consistent with that of the Ninth Circuit

                                11
Court of Appeals, the only other circuit court to have
wrestled with this issue in a similar factual context. In
Goehring v. Brophy, a group of college students challenged
the collection of student fees under RFRA, as those fees
subsidized a health insurance plan that covered abortion
services. 94 F.3d 1294, 1297 (9th Cir. 1996), cert. denied,
117 S. Ct. 1335 (1997), overruled by 117 S. Ct. 2157. In
analyzing the "least restrictive means" prong of the RFRA
test, the court analogized the challenge to university
funding to that of free exercise challenges to the
government's use of tax dollars. See id. at 1300. The court
then looked to Lee as its guide, and found that the fiscal
vitality of the university fee system would be undermined if
the plaintiffs were exempted from paying their fees on free
exercise grounds, as mandatory participation was
necessary to ensure the survival of the student health
insurance program. See id. The court also relied on the
reasoning in Autenreith, a pre-Lee war tax protester case,
as persuasive authority for its decision that mandatory
student participation in a health insurance scheme was the
least restrictive means of accomplishing the University's
goals. 94 F.3d at 1301-02. We also find this reasoning
instructive:

       The Income Tax Act does not `aid one religion, aid all
       religions, or prefer one religion over another.' Not does
       it punish anyone `for entertaining or professing
       religious beliefs or disbeliefs' . . . . It taxes plaintiffs like
       all others, because they are citizens or residents who
       have taxable income. On matters religious, it is
       neutral. If every citizen could refuse to pay all or part
       of his taxes because he disapproved of the
       government's use of the money, on religious grounds,
       the ability of the government to function could be
       impaired or even destroyed. . . . There are few, if any
       governmental activities to which some person or group
       might not object on religious grounds.

       418 F.2d at 588-89, cited in 94 F.3d at 1301-02.

In another case decided by the Court of Appeals for the
Ninth Circuit, Droz v. Commissioner, the appellant had
challenged the assessment of unpaid self-employment
social security taxes under the free exercise clause,

                               12
claiming that he had religious objections to the social
security system. 48 F.3d 1120, 1121 (9th Cir. 1995). The
court determined that the RFRA test should be applied to
his claim, and then looked to Lee as the determinative case
in analyzing his claim. See id. at 1123. The Droz court
denied his claim, noting that although compulsory
participation in the social security system interfered with
his free exercise rights, allowing him to opt out of the
system on religious grounds would threaten the stability of
the social security system by opening the door to myriad
religious exceptions. See id. at 1123-24; cf. Sherbert, 374
U.S. at 408-09 (noting that administrative problems
rendering a scheme unworkable could be the basis for
denial of religious accommodation).7

Adams also argues that a later Congressional enactment
of the exemption the Supreme Court refused to allow in Lee
demonstrates that the Commissioner can and should
accommodate religion through a series of exemptions or
alternative approaches to tax collection or at least should
prove why such religiously-based exemptions are not
feasible. However, in making this argument, Adams
_________________________________________________________________

7. A number of RFRA cases arising in other factual contexts also
demonstrate a sensitivity to the influence of pre-RFRA case law on the
analysis of claims at hand. For example, in the context of RFRA
challenges to prison policies and regulations, courts found that they
still
owe substantial deference to the judgment of prison administrators -- as
was the practice under prior case law in determining the interests being
furthered and means employed. See Lawson v. Singletary, 85 F.3d 502,
512 (11th Cir. 1996), overruled by 117 S. Ct. 2157 (1997) (finding that
the "least restrictive means" prong of RFRA was coextensive with the
Supreme Court's decision in Procunier v. Martinez, 416 U.S. 396 (1974),
in which the "limitation of First Amendment freedoms must be no
greater than is necessary or essential to the protection of the particular
governmental interest involved."); Jolly v. Coughlin, 76 F.3d 468, 476 (2d
Cir. 1996), overruled by 117 S. Ct. 2157 (1997) (stating in its analysis
of
a challenge to TB regulations that its inquiry would occur "against the
backdrop of prior decisions recognizing that courts are ill-equipped to
substitute their judgments on matters of prison administration for those
of prison authorities"); Hamilton v. Schiro, 74 F.3d 1545, 1554 n.9 (8th
Cir. 1996), overruled by 117 S. Ct. 2157 (1997) (court looks to Supreme
Court precedent, RFRA's legislative history, and its own case law for
guidance in interpreting RFRA).

                               13
misconstrues the nature of the tax system itself. We do not
doubt that such legislative enactments can and do occur,
but tax exemptions are a matter of legislative grace, see
Lull, 602 F.2d at 1168, citing New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934). It does not follow from
Congressional action on such matters that the
Commissioner or the courts are therefore encouraged to
carve out exceptions to the statutory scheme.8

Adams contends further that a finding against her is
tantamount to exempting the IRS from RFRA altogether. We
disagree. She has contested the current system of income
tax collection on the basis of her religious beliefs, and the
result this court reaches in evaluating her particular
challenge is dictated by prior case law. This finding does
not preclude the application of RFRA to the IRS in other
factual contexts. In sum, we find that the Tax Court
engaged in an appropriate analysis of Adams's RFRA claim
based upon United States v. Lee, and that appellee was not
required to produce evidence under the "least restrictive
means" prong of RFRA in order to prevail.

B. Liability for Penalties Assessed

Under 26 U.S.C. S 6651(a), if a taxpayer fails to file, a
penalty will be added unless the taxpayer can demonstrate
1) lack of willful neglect, and 2) reasonable cause. Willful
neglect may be read as "meaning a conscious, intentional
failure or reckless indifference." See United States v. Boyle,
469 U.S. 241, 245 (1985). Under the case law and
appropriate regulations, in order to demonstrate
"reasonable cause," a taxpayer must demonstrate that she
exercised ordinary care and prudence but nevertheless was
unable to file the return within the time allowed. 9 See id.;
_________________________________________________________________

8. The fact that Adams has suggested a number of alternative modes of
tax collection for herself (religiously-based checkoffs on the tax forms,
or
a separate non-military based fund for tax monies) is beside the point.
As Justice Blackmun noted, "A judge would be unimaginative indeed if
he could not come up with something a little less`drastic' or a little
less
`restrictive' in almost any situation, and thereby enable himself to vote
to
strike legislation down." Illinois State Bd. of Elections v. Socialist
Workers
Party, 440 U.S. 173, 188-89 (1979) (concurring).

9. A "reasonable cause" exception on the basis of religious opposition to
war is somewhat difficult to claim from the outset, due to the existence
14
Sanderling, Inc. v. Commissioner, 571 F.2d 174, 178-79 (3d
Cir. 1978). Whether the elements that constitute
"reasonable cause" are present in "a given case is a
question of fact, but what elements must be present to
constitute `reasonable cause' is a question of law." Boyle,
469 U.S. at 249 n.8.

Adams claims that Scott v. Commanding Officer, 431 F.2d
1132, 1136 (3d Cir. 1970), a conscientious objector case,
indicates that she was compelled by her beliefs not to file,
and that as a result, she has demonstrated reasonable
cause under the statute, because the beliefs inducing her
not to file her returns were so powerful that her actions
were beyond her control. In so claiming, she cites to
language in Scott stating that: "beliefs of conscience are
always beyond one's control; one cannot sincerely turn his
conscience on and off at will." 431 F.2d at 1136. Similarly,
Adams claims that the waiver provision of section 6654(e)(3)
for "unusual circumstances" applies to her case, claiming
that her adherence to religious beliefs and subsequent
refusal to pay taxes -- the "reasonable cause" argument set
forth above -- is a sufficiently unusual circumstance to
nullify the penalty, despite the fact that it is somewhat rare
for a court to recognize a "reasonable cause" exception as
an "unusual circumstance" that precludes a section 6654(a)
penalty. See In re Carlson, 126 F.3d 915, 921 (7th Cir.
1997), cert. denied, 118 S. Ct. 1388 (1998) (listing cases);
Webster v. United States, 375 F.2d 814 (Ct. Cl. 1967)
(finding a reasonable cause exception due to changes in tax
code and taxpayer's lack of information as rural landowner).10
_________________________________________________________________

of cases upholding the assessment of a "frivolous return" penalty under
26 U.S.C. S 6702 against persons claiming "war tax" deductions or
exemptions. See Nelson, 796 F.2d at 165-67 (addressing constitutionality
of section 6702); Welch, 750 F.2d at 1108-09 (rejecting free exercise
challenge to section 6702); Tax Equity and Fiscal Responsibility Act, S.
Rep. 97-494 (1982), 1982 U.S.C.C.A.N. 781, 1023-24 (discussing protest
returns, including "war tax" protest returns, as necessitating the
enactment of section 6702).

10. Adams also argues that the statutory scheme that permits penalties
if the taxpayer demonstrates "reasonable cause" or "unusual
circumstances" has constitutional implications. She contends, relying on

                               15
We find Adams's arguments appealing, but ultimately
unconvincing. She has misconstrued Scott; the focus of the
court's analysis in Scott was on the sincerity of the beliefs
of the individual in question -- the sincerity of Adams's
beliefs is not in question. However, despite the sincerity of
those beliefs, her claim has returned this court to a well-
established line of cases involving challenges to the
collection of taxes on religious grounds. Although Adams's
beliefs may be unusual as compared to the general
population, the very body of case law relating to war tax
protesters indicates that in the realm of tax litigation, she
is one of many. As a result, her "compulsion" argument
affords her no excuse, as the prior plaintiffs were also
compelled by religious belief, but, like Adams, made the
difficult decision to act in a manner contrary to law.
Moreover, Adams is asking this court to draw a distinction
between holding sincerely felt political and religious beliefs
and facing the consequences of those beliefs; we have been
and continue to be reluctant to make such a distinction.
We have noted, in slightly different contexts, that plaintiffs
engaging in civil disobedience through tax protests must
_________________________________________________________________

language in Smith, that where a governmental entity has in place a
system of "individual exemptions," the failure to extend those exemptions
to a case of religious hardship constitutes discrimination on the basis of
religious belief. 494 U.S. at 884. The "reasonable cause" exception,
according to Adams, is one such "individual exemption," and therefore,
the assessment of a penalty against her when she has demonstrated
"reasonable cause" is unconstitutional. The concept of "individual
exemptions" in Smith is not the same as "reasonable cause" in the I.R.C.,
and we have little difficulty finding that the imposition of penalties on
Adams does not constitute discrimination on the basis of her religion.
The exemptions at issue here are uniform and facially neutral; the
exemption at issue in Sherbert allowed for special protection for
employees opposed to working on Sundays, and allowed the Commission
making the determination to take religious and personal beliefs into
account; here, the exemptions at issue are uniform and facially neutral.
See Sherbert, 374 U.S. at 401-03, 406-09. In terms of both statutory
interpretation and constitutional interpretation, Adams's definitions of
"reasonable cause" and "unusual circumstances" are outside of the
bounds of what these terms mean. See McMahan v. Commissioner, 114
F.3d 366, 368-69 (2d Cir. 1997) (setting out parameters of reasonable
cause exception).

                               16
pay the penalties incurred as a result of engaging in such
disobedience. See Kahn, 753 F.2d at 1215-16; cf.
Malinowski, 472 F.2d at 855-58.

We will affirm the decision of the Tax Court.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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