Death and Taxes

In the murky underground of patriots, tax resisters, and cash-strapped working stiffs, Karl Granse's basement is Law Central. Now he's about to watch his most famous

In December 1994, James Nichols traveled to Appleton, Wisconsin, to hear Granse's advice for dropping out of the system. Long a stronghold for the John Birch Society, Appleton is just southeast of Tigerton, a pinprick on Wisconsin maps that in the late '70s and early '80s was a hotbed for the violently anti-tax Posse Comitatus. The lecture, plus an assortment of books and audio tapes, cost Nichols $600.

But Nichols says Granse's fee was money well spent. When he got back to his Michigan farm, he shared his newfound understanding with his brother. Terry, Nichols says, became even more entranced than he was, shuffling off to law libraries to research Granse's legal precedents.

The Nichols brothers were already deeply immersed in anti-government activity; as early as 1990, James had tried to renounce his citizenship. He gave up his driver's license and Social Security card and wrote to the clerk in Sanilac County, Michigan, explaining that he no longer considered himself a citizen. Terry Nichols did the same. (Ironically, James Nichols apparently has no qualms about taking cash from the government: Over the course of six years, Nichols accepted $89,950 in federal farm subsidies.)

Boiled down, what Granse taught Nichols was this: Man inherits certain rights from God. The purpose of the U.S. Constitution is to keep the government from interfering with those rights, a point on which government has misled the people. The government has told people, for instance, that driving is a privilege that comes with the purchase of a license. In essence, the government is selling back to people rights they already possess.

The tax arguments mustered from Granse's faded law library are far more complicated. Government attempts to tax people's labor and the product of their brains--intellectual property--he argues. But it's God, not the government, who gives humans their skills to think and work. Thus, the government has no business demanding money for something it did not create or dispense.

What's more, Granse explains, most people believe they are citizens of the United States, and that they thus must pay taxes. But in fact, people live in states and nowhere does federal law discuss an income tax on citizens of U.S. states, he says. And finally, when it came to his own state taxes, Granse argues that the government doesn't really have the power to tax anyone who's not a public employee or transactions that don't take place on government property.

In practice, Granse's courtroom wangling often seems to rest on arguing over technicalities. When the IRS notified him that it was seizing his house, for example, court records show that he demanded the process server leave his subpoena between the front and screen doors. When that happened, he filed a voluminous pleading with the federal judge overseeing his case, arguing that he hadn't been properly notified of the seizure, so the IRS couldn't sell his property.

The IRS has debunked similar arguments so many times that its Twin Cities office has issued a brochure titled "Illegal Tax Protests: Facts vs. Fiction." The flier lists a number of false but common tax-protester arguments: "Protester Claim: 'I'm a private citizen of the sovereign state of (Minnesota, North Dakota, South Dakota, etc.) and not a citizen of the United States,'" reads one example. "'Therefore I do not need to file a Form 1040 and am not subject to the United States federal income taxes.' Truth: This argument was found to be frivolous and without merit with no basis in fact or law." Courts often levy huge fines on people who continue to raise the most common anti-tax theories.

None of this, however, diminishes Granse's stature on the underground lecture circuit. "He is a self-made law professor," James Nichols says of Granse. "He teaches people their rights. If you don't know the Bill of Rights, how do you know your rights? You can't know them unless you know the Constitution and stuff." Granse's letterhead shows him as head of Citizens for a Constitutional Republic, an umbrella group that directs 26 affiliates in 21 states with more than 3,000 members in Minnesota.

It's worth noting that while tax resistance is usually equated with violent hostility to government in all its forms, the two are not always the same. Like many tax protesters, for example, Granse argues that U.S. currency isn't really legal tender, not because it's printed by the government, but precisely because it's not: It comes from the "private" Federal Reserve Bank. (And note that the backs of those dollar bills bear the Latin words Novus Ordo Seclorum, meaning "New Order of the Centuries," or, as many translate it, "New World Order.") The only true currency, many in the patriot movement believe, is gold and silver.

In addition to settling his state income-tax case with bullion, in 1994 Granse made a donation of $11,500 worth of precious metal to federal court officials in St. Paul--out of concern, he said, over Congressional budget cuts.

The anti-tax ideas people pay handsomely to hear Granse explain are hardly new. Most have long been popular with underground groups, particularly in the Midwest. In the late '70s and early '80s, similar notions were circulated by the Posse Comitatus, culminating in the 1983 shootouts that killed North Dakota Posse member Gordon Kahl and two federal agents (see James Ridgeway's portrait of the Posse in this issue). From there, the philosophy spread through the rest of the patriot movement. It's been preached by the Freemen in Montana and the secessionists who make up the Republic of Texas. Adherents often refer to themselves as "sovereigns," that is, people not subject to what they consider a fraudulent government's authority. (Although Granse espouses many of the sovereign ideas preached by the Posse, he says it and groups like it are "dangerous." He says he tells clients to rely "only on what's in the law books.")

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