1999 Decisions

Opinions of the United

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Precedential or Non-Precedential: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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Recommended Citation

"Adams Lippincott v. Comm IRS" (1999). 1999 Decisions. Paper 56.

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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 nonmilitary 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 courtcreated 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 
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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 wellestablished 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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