How to do it:

Your taxes are withheld from your paycheck based on the number of deductions you have: spouse, children, etc. The calculation is complicated, so the amount is rarely perfect, and many people intentionally under-withhold to ensure they do not have a tax bill in April. This benefits the government by offering them an interest-free loan during the year, and the individual by acting as forced savings.

Don’t let this government use your money for free. Adjust your deductions so that you owe a small amount at the end of the year. To avoid penalties, you want to underpay no more than $1000, or 10% of the total bill. (See details about under-payment penalties here.)

In addition to depriving the government of free loans, you control when you send them a check. A certain number of returns are flagged for review each year, or may be caught up by simple errors in your paperwork (like entering a number wrong) or employer paperwork. Normally these are resolved within 60 days, but currently some people are reporting 2024 filings still under review with little to no recourse. Better to send them a check than wait for them to send your own money back.

Tax protests

Adjusting withholding is NOT a tax protest. It’s your legal right. There are several movements afoot to plan for tax protests, but we have not yet seen a well organized one we can recommend. To work, it will need very widespread participation, and most are illegal, so proceed with caution. Some of the ideas we have seen include:

• Maximize witholdings in Dec/Jan to send a message that if the government isn’t running, we don’t pay. This is a smart plan because it is visible (with sufficient participation) and minimizes legal exposure since only 1/12th of a year’s taxes would be redacted. (Below the penalty threshold.)
• Encourage Blue states to withhold their federal tax payments. This is worth discussing with local officials and would shift any legal challenges to them.
• Withholding all taxes until government services are restored. This is high-risk. Like other economic actions, it requires critical mass to work. Unlike other economic actions it is clearly illegal and participants should assume a prison sentence is likely, unless enough participate to make that impossible. (Then organizers should.)