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. e du/thir dc ir c uit_1999/56Filed 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 Senio r District Court Judge for the District of New Jersey, sitting by de signation.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 f und the military. She also argues that RFRA and the free ex ercise clause mandate a finding that her religious beliefs
constitute "reasonable cause" under 26 U.S.C. S 665 1 for her failure to file returns or pay tax and an"unusu al circumstance" which makes it "against equity and go od conscience" for the Commissioner to impose the pena lty 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 Qua ker; she currently works as a "Peace Field Secretary" fo r the Philadelphia Yearly Meeting of the Religious Societ y 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. Fr om 1985 to 1989, Adams declared herself exempt from taxatio n, so no federal income tax would be withheld from her pa y. In 1989, the IRS sent a letter to her employer, the Philadelphia Yearly Meeting, directing it to withho ld taxes from her salary as if she were married and claiming one withholding allowance.

Adams has taken pains to ensure that she does not p rofit from her tax protests and to demonstrate that her b eliefs

2regarding 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 determ ined
that the course of her conduct is the result of a"l eading" from God. She asserts that she would voluntarily pa y 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 n onmilitary expenditures, or that, with the consultati on of a clearness committee, she would be willing to consid er any other form of accommodation of her beliefs that cou ld be offered by the government.

The Commissioner assessed deficiencies and penaltie s 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 cour t. 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. Commis sioner, 30 F.3d 494, 498 (3d Cir. 1994); Lazore v. Commissi oner, 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 agr ee 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 sec tion 5 of the Fourteenth Amendment. For the purposes of this appeal, we assume without deciding that RFRA is

3constitutional 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 resu lts from a rule of general applicability, except as pro vided 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 govern mental interest; and

(2) is the least restrictive means of furthe ring that compelling governmental interest.

___________________________________________________ ______________

1. In general, courts that have addressed the quest ion of constitutionality have found that RFRA is constitut ional 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. Cath olic 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.3 d 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 contex t); In re Gates, 212

B.R. 220 (Bankr. W.D.N.Y. 1997) (finding that Boerne ove rruled RFRA altogether). Some commentators have noted that RFRA may be unconstitutional as applied to federal law. See Ma rci Hamilton, The Religious Freedom Restoration Act is Unconstitution al, Period, 1 U. Pa. J. Const. L. 1 (1998); Aurora R. Bearse, Note, RFRA: I s 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 Const itutional Future of Religious Freedom Legislation, 20 U. Ark. Little Ro ck L.J. 715 (1998) (arguing that RFRA is constitutional as applied to the federal government).

4Adams argues that under RFRA, she is exempt from

federal income tax for the years in which she has b een assessed a deficiency, because requiring her to pay these taxes substantially burdens her religious beliefs. She concedes that the government has a compelling inter est 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 res trictive means of furthering the government's interest. She argues that this failure of proof requires this court to r everse the
Tax Court and find that Adams owes no taxes for the years in question, and that she is not required to pay in come 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 gov ernment's compelling interest in tax collection. The Commissi oner accepts Adams's acknowledgment that the government has a compelling interest in the collection of taxes, a nd urges us to find that the current system -- uniform and mandatory in nature -- is the least restrictive mea ns of furthering that interest.

There is little doubt that RFRA was enacted as a di rect response to Employment Division v. Smith, and to re store the tests that were routinely employed before the S upreme Court's ruling that neutral, generally applicable l aws 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, t he
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 re gulation or practice at issue furthers a "compelling interes t," and that it furthers that interest by the "least restri ctive means." See S 2000bb-1; Small v. Lehman, 98 F.3d 76 2, 767 (3d Cir. 1996), overruled by 117 S. Ct. 2157 (1 997).2

___________________________________________________ ______________

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

5In enacting RFRA, Congress specifically announced i ts

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 guarant ee 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 preci se contours of the elements of the RFRA test is a some what different matter, as neither the statutory provisio ns, the legislative history, nor the floor debates indicate exactly how the elements of the test are defined, or are de fined 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. O ct. 26, 1993) (statements of Senators Feingold, Lieberm an, and Bradley); 139 Cong. Rec. S14350-01, S14350, S14353 (daily ed. Oct. 26, 1993) (statements of Senators K ennedy and Hatch); 139 Cong. Rec. H2356-03, H2356-59, H236 0- 61 (daily ed. May 11, 1993) (remarks of Representat ives Brooks Edwards, Fish, Hughes, and Schumer); The Religious Freedom Restoration Act: Hearing on S. 29 69 Before the Comm. on the Judiciary of the United Sta tes Senate, 102nd Cong. 2, 129-35 (Sept. 18, 1992). Whi le prior cases touched on one or more of the aspects o f the RFRA test, these elements -- substantial burden, compelling interest, least restrictive means -- did not constitute a comprehensive standard, let alone a un iform or established test, prior to Smith.3 The instant cas e presents

___________________________________________________ ______________

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

6the issue, as to whether, and if so, how, we should

construe RFRA in light of prior case law. The legis lative history of both the House and the Senate versions o f 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 resul t reached in any particular court decision involving t he free exercise of religion, including those cited in the act
itself. This bill is not a codification of t he result reached in any prior free exercise decision but rather the restoration of the legal standard that w as applied in those decisions. Therefore, the compellin g 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 co dify." See 117 S. Ct. at 2171. We note that this "element" has in fact ap peared sporadically in those terms or as a "narrowly tailored" requirement . See Smith, 494 U.S. at 894-95 (O'Connor, concurring) (noting that in fr ee exercise cases, "we have respected both the First Amendment's express t extual mandate that the governmental interest in regulation of conduct by requiring the government to justify any substantial burden on rel igiously motivated conduct by a compelling state interest and by means narrowly tailored to achieve that interest," citing Hernandez v. Comm issioner, 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., 48 0 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 religio us 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 Judicia ry Committee markup of the bill, which states in pertinent part:

Grassley: Does this bill change the way courts asse ss 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 de finition of compelling interest, does it?

7The legislative history accompanying the Senate bil l also

includes the following directive: "The committee ex pects
that the courts will look to free exercise cases de cided prior to Smith for guidance in determining whether the ex ercise 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 analo gous to the tax system are, therefore, instructive. In Unit ed 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 tha t 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 restric t the operating latitude of the legislature." . . . Unlike the situation presented in Wisconsin v. Yoder, s upra, it would be difficult to accommodate the compre hensive

___________________________________________________ ______________

Hatch: RFRA reestablishes a very familiar and tradi tional standard of review that the courts have been applying since the 1963 decision Sherbert v. Verner. That is why we do not attempt t o 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 governm ental interests that

are compelling. The courts will continue to determine w hether burdens on religious exercise are justified, based upon a cons ideration and weighing
of all relevant facts and circumstances. Historical ly, the courts have had little difficulty identifying important governmenta l interests. For example,
the courts have found eradication of racial discrim ination 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 actio n. In determining the bounds of Congressional intent in creating that sta tutory right we look to Congress's statements about pre-Smith case law a s instructive for our purposes, namely, to "say what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803).

8social security system with myriad exception s flowing

from a wide variety of religious beliefs. Th e 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 se gregated for use only in furtherance of the statutory pro gram. There is no principled way, for purposes of this c ase, to distinguish between general taxes and those imposed under the Social Security Act. If, for examp le, a religious adherent believes war is a sin, an d if a certain percentage of the federal budget can be iden tified as devoted to war-related activities, such indi viduals would have a similarly valid claim to be exe mpt from paying that percentage of the income tax. Th e tax system could not function if denominations w ere allowed to challenge the tax system because tax payments were spent in a manner that violate s their religious belief. . . . Because the broad pu blic 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 spiritu al training classes and sessions, including a free exe rcise challenge. In upholding the disallowance of exempti ons in the face of their free exercise challenge, the Hern andez
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 s ystem," free of "myriad exceptions flowing from a wi de 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 deduc tions and exemptions in the Code also is of no consequ ence, for the guiding principle is that a tax "must be uniformly

9applicable to all, except as Congress provid es 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 refu sal to pay taxes as a protest against the military activit ies of the United States. See, e.g., Lull v. Commissioner, 602 F.2d 1166 (4th Cir. 1979) (per curiam); Graves v. Commis sioner, 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 Bapti st Church v. United States, 822 F.2d 1334 (3d Cir. 198 7) (social security taxes); Kahn v. United States , 75 3 F.2d 1208, 1215-16 (3d Cir. 1985); McLaughlin v. Commiss ioner, 832 F.2d 986 (7th Cir. 1987); Nelson v. United Stat es, 796 F.2d 164 (6th Cir. 1986); McKee v. United States, 7 81 F.2d 1043 (4th Cir. 1985); Collett v. United States , 78 1 F.2d 53 (6th Cir. 1985) (per curiam); Jenney v. United Stat es, 755 F.2d 1384 (9th Cir. 1985); Wall v. United States, 7 56 F.2d 52 (8th Cir. 1985); Welch v. United States, 750 F.2 d 1101 (1st Cir. 1985); Ballinger v. Commissioner, 728 F.2 d 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 th e "uniform, mandatory participation in the Federal in come 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 t he 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 ta x 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, Congres s cited cases disallowing the availability of tax exemptions on t he basis of religious practice and belief, namely, Hernandez, Lee, and Bo b Jones University v. United States, 461 U.S. 574 (1983). See S. Rep. No. 103-111 at 5.

10broad a manner, that the court did not address the "least

restrictive means" prong. She contends that the gov ernment did not meet its burden in this regard. We disagree

.

Mindful of the comments of both the House and Senat e, 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 restrict ive means have been employed to further the government' s compelling interest. Viewing the requirements of RF RA 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-- convert s the least restrictive means inquiry into a rhetorical q uestion that has been answered by the analysis in Lee. The least restrictive means of furthering a compelling intere st in the collection of taxes -- a compelling interest that A dams has conceded -- is in fact, to implement that system in a uniform, mandatory way, with Congress determining i n 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 co llection surfaced in pre-Smith case law and was answered in the negative based on the practical need of the governm ent for uniform administration of taxation, given particula rly difficult problems with administration should excep tions on religious grounds be carved out by the courts. See Lee, 455 U.S. at 259-60. We acknowledge the sincerity of Ada ms'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 o f tax
dollars to fund activities antithetical to their re ligion. See

455 U.S. at 259. We also note that the same concern s with religious pluralism that prompted the passage of RF RA have also prompted past courts' reluctance to becom e involved in determining whether a claimant's belief s are "sincerely held," due to the multiplicity of belief s in this country; these concerns also fortify our resistance to courtcreated exemptions to the income tax system. See Le e, 455 U.S. at 259; Lull, 602 F.2d at 1168-69; cf. Kahn, 7 53 F.2d

at 1214.

Our approach to this particular form of tax challen ge under RFRA is consistent with that of the Ninth Cir cuit

11Court of Appeals, the only other circuit court to h ave

wrestled with this issue in a similar factual conte xt. In Goehring v. Brophy, a group of college students cha llenged the collection of student fees under RFRA, as those fees subsidized a health insurance plan that covered abo rtion services. 94 F.3d 1294, 1297 (9th Cir. 1996), cert. denied, 117 S. Ct. 1335 (1997), overruled by 117 S. Ct. 215 7. In analyzing the "least restrictive means" prong of th e RFRA test, the court analogized the challenge to univers ity funding to that of free exercise challenges to the government's use of tax dollars. See id. at 1300. T he court then looked to Lee as its guide, and found that the fiscal vitality of the university fee system would be unde rmined 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 hea lth insurance program. See id. The court also relied on the reasoning in Autenreith, a pre-Lee war tax proteste r case, as persuasive authority for its decision that manda tory student participation in a health insurance scheme was the least restrictive means of accomplishing the Univer sity's goals. 94 F.3d at 1301-02. We also find this reason ing
instructive:

The Income Tax Act does not `aid one religio n, aid all religions, or prefer one religion over anoth er.' Not does it punish anyone `for entertaining or profes sing religious beliefs or disbeliefs' . . . . It taxes plaintiffs like all others, because they are citizens or res idents who have taxable income. On matters religious, i t is neutral. If every citizen could refuse to pa y 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 co uld 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 claus e,

12claiming that he had religious objections to the so cial

security system. 48 F.3d 1120, 1121 (9th Cir. 1995) . The court determined that the RFRA test should be appli ed to his claim, and then looked to Lee as the determinat ive case in analyzing his claim. See id. at 1123. The Droz c ourt denied his claim, noting that although compulsory participation in the social security system interfe red with his free exercise rights, allowing him to opt out o f the system on religious grounds would threaten the stab ility of the social security system by opening the door to m yriad religious exceptions. See id. at 1123-24; cf. Sherb ert, 374 U.S. at 408-09 (noting that administrative problems rendering a scheme unworkable could be the basis fo r denial of religious accommodation).7

Adams also argues that a later Congressional enactm ent 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 leas t should prove why such religiously-based exemptions are not feasible. However, in making this argument, Adams

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7. A number of RFRA cases arising in other factual contexts also demonstrate a sensitivity to the influence of pre-R FRA case law on the analysis of claims at hand. For example, in the con text of RFRA challenges to prison policies and regulations, cour ts found that they
still owe substantial deference to the judgment of prison administrators -- as was the practice under prior case law in determinin g the interests being furthered and means employed. See Lawson v. Singlet ary, 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 coe xtensive with the Supreme Court's decision in Procunier v. Martinez, 416 U.S. 396 (1974),
in which the "limitation of First Amendment freedom s must be no greater than is necessary or essential to the prote ction of the particular governmental interest involved."); Jolly v. Coughli n, 76 F.3d 468, 476 (2d Cir. 1996), overruled by 117 S. Ct. 2157 (1997) (st ating in its analysis

of a challenge to TB regulations that its inquiry woul d occur "against the backdrop of prior decisions recognizing that courts are ill-equipped to substitute their judgments on matters of prison adm inistration for those of prison authorities"); Hamilton v. Schiro, 74 F.3 d 1545, 1554 n.9 (8th Cir. 1996), overruled by 117 S. Ct. 2157 (1997) (co urt looks to Supreme Court precedent, RFRA's legislative history, and it s own case law for guidance in interpreting RFRA).

13misconstrues the nature of the tax system itself. W e do not

doubt that such legislative enactments can and do o ccur, but tax exemptions are a matter of legislative grac e, 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 i s tantamount to exempting the IRS from RFRA altogethe r. We disagree. She has contested the current system of i ncome tax collection on the basis of her religious belief s, and the result this court reaches in evaluating her particu lar challenge is dictated by prior case law. This findi ng does not preclude the application of RFRA to the IRS in other factual contexts. In sum, we find that the Tax Cour t 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 restr ictive 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 f ile, a penalty will be added unless the taxpayer can demon strate 1) lack of willful neglect, and 2) reasonable cause . Willful neglect may be read as "meaning a conscious, intent ional
failure or reckless indifference." See United State s 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 tha t she exercised ordinary care and prudence but neverthele ss was unable to file the return within the time allowed. 9 See id.;

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8. The fact that Adams has suggested a number of al ternative modes of tax collection for herself (religiously-based check offs 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 unimag inative indeed if he could not come up with something a little less`d rastic' or a little

less `restrictive' in almost any situation, and thereby enable himself to vote

to strike legislation down." Illinois State Bd. of Ele ctions v. Socialist

Workers Party, 440 U.S. 173, 188-89 (1979) (concurring).

9. A "reasonable cause" exception on the basis of r eligious opposition to war is somewhat difficult to claim from the outset, due to the existence14Sanderling, 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 reasonab le cause under the statute, because the beliefs induci ng her not to file her returns were so powerful that her a ctions were beyond her control. In so claiming, she cites to language in Scott stating that: "beliefs of conscie nce are always beyond one's control; one cannot sincerely t urn his
conscience on and off at will." 431 F.2d at 1136. S imilarly, Adams claims that the waiver provision of section 6 654(e)(3) for "unusual circumstances" applies to her case, cl aiming that her adherence to religious beliefs and subsequ ent refusal to pay taxes -- the "reasonable cause" argu ment set forth above -- is a sufficiently unusual circumstan ce to nullify the penalty, despite the fact that it is so mewhat rare for a court to recognize a "reasonable cause" excep tion 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) (listin g cases); Webster v. United States, 375 F.2d 814 (Ct. Cl. 196 7) (finding a reasonable cause exception due to change s in tax code and taxpayer's lack of information as rural la ndowner).10

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of cases upholding the assessment of a "frivolous r eturn" penalty under 26 U.S.C. S 6702 against persons claiming "war tax" deductions or exemptions. See Nelson, 796 F.2d at 165-67 (address ing constitutionality of section 6702); Welch, 750 F.2d at 1108-09 (rejec ting free exercise challenge to section 6702); Tax Equity and Fiscal R esponsibility 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 ne cessitating the enactment of section 6702).

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

15We 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 t he beliefs of the individual in question -- the sincerity of A dams's beliefs is not in question. However, despite the si ncerity of those beliefs, her claim has returned this court to a wellestablished line of cases involving challenges to t he 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 w ar tax protesters indicates that in the realm of tax litig ation, she is one of many. As a result, her "compulsion" argum ent affords her no excuse, as the prior plaintiffs were also compelled by religious belief, but, like Adams, mad e the difficult decision to act in a manner contrary to l aw. Moreover, Adams is asking this court to draw a dist inction between holding sincerely felt political and religi ous beliefs and facing the consequences of those beliefs; we ha ve been
and continue to be reluctant to make such a distinc tion. We have noted, in slightly different contexts, that plaintiffs engaging in civil disobedience through tax protests must

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language in Smith, that where a governmental entity has in place a system of "individual exemptions," the failure to e xtend those exemptions to a case of religious hardship constitutes discrim ination on the basis of religious belief. 494 U.S. at 884. The "reasonable cause" exception, according to Adams, is one such "individual exempti on," and therefore, the assessment of a penalty against her when she ha s 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 impo sition of penalties on
Adams does not constitute discrimination on the bas is of her religion. The exemptions at issue here are uniform and facial ly neutral; the exemption at issue in Sherbert allowed for special protection for employees opposed to working on Sundays, and allowe d the Commission making the determination to take religious and pers onal 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, A dams's definitions of
"reasonable cause" and "unusual circumstances" are outside of the

bounds of what these terms mean. See McMahan v. Com missioner, 114 F.3d 366, 368-69 (2d Cir. 1997) (setting out parame ters of reasonable cause exception).

16pay 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

17