Editor’s Note: The following article is not intended as tax advice. For such advice consult a licensed professional. Further, while not a tax professional, the following was reviewed by a tax attorney.

While taxation is coercive, economically distortive, and ultimately something to be abolished, it does not follow that one may simply opt out of the existing legal regime. As much as one might wish otherwise, there does exist—at present—a binding legal obligation to report and pay income taxes under U.S. law. This article then is a response to a recent post on Twitter by Peter Schiff, who argued that, unlike excise taxes, the Internal Revenue Code contains no provision that creates a liability to pay the income tax, rendering it effectively “voluntary.”

This is not a new argument. It is, in fact, one of the more persistent claims advanced by so-called “tax protester” theories. And like most such claims, it depends less on the structure of the law than on a selective reading of it.

Schiff’s argument proceeds by comparison. He notes, correctly, that certain excise taxes—on alcohol, tobacco, and wagering—pair a provision that imposes the tax with another that explicitly creates liability for its payment. For example, 26 U.S.C. § 5001 imposes a tax on alcohol, while § 5005 establishes liability for that tax. He then observes that 26 U.S.C. § 1 imposes an income tax but claims that no analogous “liability” provision exists. From this, he argues that payment of the income tax is legally voluntary.

The difficulty is that this argument imposes a template on the Internal Revenue Code that simply does not exist. It assumes that all taxes must be structured identically, one section imposing the tax, another explicitly declaring liability, when in fact Congress has drafted different types of taxes in different ways. Excise taxes, which apply to specific activities or industries, are often written in a more compartmentalized fashion. The income tax, by contrast, is broad-based and operates through an integrated framework of provisions that, taken together, establish both liability and enforcement.

To understand this, one must look not for a single “magic sentence,” but look at the system as a whole.

Start with 26 U.S.C. § 1, which imposes a tax on the taxable income of individuals. That provision does not stand alone. It is immediately connected to § 61, which defines “gross income” in sweeping terms; § 63, which defines “taxable income”; and § 6012, which requires individuals above certain income thresholds to file returns. These sections collectively establish who is subject to the tax and on what base.

From there, the obligation becomes explicit. Section 6151(a) provides that when a return is required, “the person required to make such return shall, without assessment or notice…pay such tax.” This is not permissive language. It is a direct statutory command. The idea that the income tax is “voluntary” in the sense of optional payment cannot be squared with this provision.

The enforcement mechanisms follow naturally. Section 6201 authorizes the IRS to assess taxes. Section 6321 creates a lien in favor of the United States when a person “liable to pay any tax neglects or refuses to pay.” One does not need an additional, standalone declaration of liability when the Code already presumes it in the context of assessment, collection, and enforcement.

In short, the liability framework for the income tax is distributed across multiple sections. It is not packaged in the same way as certain excise taxes, but it is no less real for that reason.

A second point of confusion—one that Schiff’s argument implicitly relies upon—is the meaning of “voluntary compliance.” This phrase is frequently invoked in discussions of tax administration and is often misunderstood. In ordinary language, “voluntary” suggests something optional, something one may choose to do or not do without consequence. That is not how the term is used in the context of federal taxation.

“Voluntary compliance” refers to the method by which the tax system operates: it is a system of self-assessment. Taxpayers are expected to calculate their own income, apply the relevant rules, and report the result. The government does not, in the first instance, calculate each individual’s tax liability and send a bill. But the fact that the system relies on self-reporting does not mean that compliance itself is optional. It means only that the initial calculation is performed by the taxpayer rather than by the state.

This distinction is well understood in the courts, which have addressed, and uniformly rejected, the claim that the income tax is voluntary in the sense suggested by Schiff. Federal courts have repeatedly characterized such arguments as frivolous, and in many cases have imposed penalties on those who advance them in litigation. One need not admire the current tax regime to recognize that, as a matter of positive law, the obligation to pay is firmly established.

Why, then, do excise taxes look different? The answer lies in their scope and purpose. Taxes on alcohol, tobacco, or wagering are tied to specific, regulated activities and often apply to identifiable classes of taxpayers, manufacturers, importers, or operators within a particular industry. It is therefore administratively convenient to spell out liability in a discrete provision. The income tax, by contrast, applies broadly to individuals and entities meeting defined income thresholds. Its structure reflects that breadth, weaving together definitions, filing requirements, payment obligations, and enforcement mechanisms into a single, integrated system.

None of this should be taken as a defense of the income tax on moral or economic grounds. From an Austrian perspective, the income tax distorts incentives, penalizes productivity, and expands the reach of the state in ways that are both inefficient and unjust. From a libertarian perspective, the case for its abolition is absolute. But there is a difference between arguing that a law is unjust and arguing that it does not exist.

The bottom line is straightforward. However compelling the critique of taxation may be, and it is compelling, the current legal framework in the United States imposes a clear obligation to report and pay income taxes. To suggest otherwise is not a clever reading of the code; it is a misunderstanding of how the code is written and likely to land you in hot water with the IRS.