April 27, 2018
In commemoration of 500 year anniversary of Martin Luther’s religious revolution, Ann Chen, a dual licensed attorney both in the United States and Taiwan, was invited to compared how the governments in the U.S. and Taiwan deal with the misconduct of their taxation bureaus by Association of World Citizens, on Oct. 30, 2017. In the speech, she first quoted U.S. Chief Justice John Marshall words that, “The power to tax involves the power to destroy,” and then indicated that unjustified taxes can violate people’s property right and other rights and bring them great emotional stress. Since taxation plays a pivotal role in people’s lives, a government must ensure that its tax policies and practices are just and reasonable and that its judiciary is independent to prevent any abuse of power by the tax agency.
Recently, the U.S. Justice Department settled lawsuits with the Tea Party and other conservative groups who claimed that they were unfairly targeted by the Internal Revenue Service (IRS). In 2013, it was revealed that the IRS had unfairly scrutinized conservative groups during their applications for tax-exempt status, based on their names or political leaning. This drew wide condemnation of the agency and triggered several investigations. The acting IRS commissioner at the time was forced to resign. In Oct. 2017, the government agreed to a multimillion-dollar settlement, and the IRS admitted it was wrong. Regarding the IRS’s conduct, U.S. Attorney general Jeff Sessions said in a statement, “Hundreds of organizations were affected by these actions, and they deserve an apology from the IRS. We hope that today’s settlement makes clear that this abuse of power will not be tolerated.”
In Taiwan, there is a landmark case of human rights violations—Tai Ji Men’s tax case, where thousands of people’s human rights have been violated by the tax agency. Taiwan’s taxation bureau, simply based on a prosecutor’s false claim that Tai Ji Men is a cram school, taxed Tai Ji Men accordingly, totally ignoring the fact that Tai Ji Men is a non-profit organization that promotes love, peace, and traditional Chinese culture. Even after three instances of criminal trials have all acquitted Tai Ji Men of all the charges brought by the prosecutor and ruled that there was no tax evasion, the taxation bureau has continued to use the prosecutor’s indictment as evidence to impose taxes on Tai Ji Men for over 20 years.
Taiwan’s taxation bureau seriously violated the law, especially the rules of evidence and due process, in the case. First, an indictment is simply a statement by a prosecutor, which needs to be verified in a court of law, and can never be used as evidence. Second, it should not have issued a tax bill to Tai Ji Men when the case was still in trial in court; it should wait for the court’s decision to determine whether there was actually tax evasion. Third, after three instances of court all acquitted Tai Ji Men of tax evasion, the taxation bureau should have canceled its unjustified tax bill.
However, the taxation bureau never admits its mistakes in the case and refuses to cancel the tax bill. The case was then filed in the administrative court. Nevertheless, the judges in the administrative court are not independent, and they do not make decisions to resolve the case. Even when they found that the taxation bureau failed to follow the rules of evidence, they simply made a decision, demanding the taxation bureau to make another appropriate tax disposition. Since the taxation bureau refused to admit its mistakes and cancel the tax bill, it made another unjustified tax disposition—a new tax bill with a slightly lesser amount than the previous one. Tai Ji Men was therefore forced to file another case with the administrative court to settle the new tax bill but only ended up getting the same result—it won its case in the administrative court but the judges dared not resolve the case and only demanded the taxation bureau to make another tax disposition. For this reason, the cycle has continued and the case has dragged on for over 20 years, and innocent taxpayer’s rights have been seriously violated.
She argued that some people say that Taiwan is a democracy, but actually it is not. She firmly believe that Taiwan’s government needs to take immediate actions to uphold the rule of law and move toward true democracy. Its first step is to reform its tax system and ensure the independence of its judiciary.
The fact that the U.S. government settled with those plaintiffs and apologized to them signifies the role of the judiciary in the protection of taxpayer’s human rights. Regrettably, Taiwan’s taxation bureau has repeatedly infringed upon its taxpayer’s rights, but Taiwan’s judiciary fails to curb the abuse of power by the taxation bureau. In the end, she expressed her hope sincerely that Taiwan would soon become a true democratic country that protected its taxpayer’s human rights. And its first step were to resolve the Tai Ji Men’s tax case.