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January 2, 1974

American Friends Service Committee, Lorraine Cleveland and Leonard Cadwallader, Plaintiffs
The United States of America, Defendant

Newcomer, District Judge.

The opinion of the court was delivered by: NEWCOMER

NEWCOMER, District Judge:

 Pursuant to Federal Rule of Civil Procedure 52(a) the Court makes the following Findings of Fact and Conclusions of Law.

 1. The American Friends Service Committee (hereinafter AFSC), is a religious corporation which was founded in 1917, with the original purpose of performing war relief work in World War I; it was intended to provide employment for conscientious objectors to war who were to perform alternative civilian service. Throughout its history since that time, although its operations are much expanded, the AFSC has continued to work in the same vein, engaging in religious, charitable, social, philanthropic and relief work throughout the United States and in foreign countries. The corporation is governed by a board of directors consisting of forty members of the Religious Society of Friends, or Quakers, and it employs a paid staff of 450 to 500 persons, as well as several thousand volunteer workers. Because of the nature and goals of AFSC, a large proportion of its employees -- approximately a third -- are members of the Religious Society of Friends; a large proportion, by reason of religious training and belief, are conscientiously opposed to participation in war in any form; and among the male employees, many have been recognized by the Selective Service System as conscientious objectors. Because of its nature and goals, and because of the character of the men and women who are drawn to work for it, the AFSC as a body is almost unique in its corporate concern with matters of war and peace and with matters affecting the consciences of its employees.

 2. Plaintiff Lorraine Cleveland is an employee of the AFSC, and with occasional interruptions, has worked for the AFSC continuously since October 1944; she has held a wide variety of positions, and presently is Director of the Africa and Middle East Programs in the AFSC's International Service Division. She has been a member of the Religious Society of Friends since 1947. Her late husband, who also spent much of his working life as an employee of Quaker organizations, was a duly recognized conscientious objector during World War II, who performed authorized alternative civilian service in a civilian public service camp. Mrs. Cleveland has been a pacifist since 1930, and because of her deeply held religious beliefs, she is conscientiously opposed to participation in war in any form. As a part of this religious and conscientious objection to war, it is contrary to her religious principles to contribute to the waging of war through the voluntary payment of taxes which are put to that purpose.

 3. The individual plaintiff Leonard Cadwallader began employment with the AFSC in the autumn of 1969, and held a position as the Director of Youth Programs until he resigned from the Service Committee in the autumn of 1971. He is a "birthright" Quaker, having been born in a Quaker family, and having been a member of the Religious Society of Friends throughout his life. Mr. Cadwallader has been conscientiously opposed to participation in war in any form throughout his life; he was recognized as a conscientious objector by the Selective Service System, and was permitted to perform alternative civilian service in lieu of induction into the military. In 1969, Mr. Cadwallader, like Mrs. Cleveland, had come to the conclusion that his religious opposition to war extended to a conscientious duty not to pay voluntarily those taxes which were used to finance war and military activities.

 4. Dr. Edwin Bronner is an expert on the history of Quakerism in the United States.

 5. Dr. Bronner's deposition testimony establishes that, although there is no formal creed or dogma in Quakerism, it has been true throughout the history of the Religious Society of Friends, since its beginnings in the seventeenth century, that most Quakers have considered it an integral part of their faith to bear witness to the beliefs which they hold. It has always been the prevailing view that simple preaching of one's beliefs is not sufficient, and that one's actions must accord with and give expression to one's beliefs. Many of the employees of the AFSC, including particularly the individual plaintiffs Cleveland and Cadwallader, share in this belief, and for these employees, the operation of the withholding tax, which leaves them no option as to the payment of the taxes which they conscientiously question, operates as a direct abridgment of the expression and implementation of deeply cherished religious beliefs.

 6. During the decade of the 1960's, and especially in the latter part of that period, the AFSC began to face increasing difficulty as a result of its acts as an employer, in performing its statutory duty of withholding federal income taxes from the salaries of its employees. As ever larger numbers of its employees came to believe that they could not, in good conscience, voluntarily pay taxes in support of war, both employees and contributors became more concerned with the AFSC's continued withholding of employee taxes, and the consequent frustration of the employees' expression of their religious beliefs. Many employees, including the individual plaintiffs in this action, questioned whether they could continue their employment with AFSC if it did not cease withholding their taxes. Several employees directly threatened to resign over this or related issues, and at least one employee, Thomas Flower, actually did resign over war tax issues.

 7. One of the 300 or so regular employees of AFSC was shown to have resigned in protest over what he considered to be AFSC's failure to take more vigorous action to stop withholding taxes alleged to be used for military purposes. However, that employee was replaced from among a large number of applicants for employment.

 8. The plaintiff, Leonard Cadwallader, has resigned from AFSC for reasons unrelated to the withholding tax issue and plaintiff, Lorraine Cleveland, disavows any intention to resign even if AFSC is required to withhold the taxes to which she objects.

 10. Although the amounts in question were not withheld from the respective employees' salaries, the AFSC nevertheless paid equivalent amounts from its own treasury over to the Internal Revenue Service, in an effort to have the maximum compliance possible with the law, consistent with the demands of conscience, and in order to avoid the invocation of criminal penalties against its officers. It was stipulated before trial that a payment of $574.09 was remitted on February 10, 1970, representing such payments for five employees, including the individual plaintiffs, for the final quarter of 1969. It was also stipulated that on February 12, 1970, the AFSC submitted to the Internal Revenue Service a claim for refund for the amount in question, explaining the religious and conscientious position of itself and its employees. On March 5, 1970, a letter was directed to the AFSC by Earl L. Torgerson, Director of the Internal Revenue Service, Mid-Atlantic Region, denying the claimed refund. The AFSC therefore was compelled to make a double payment of the amounts in question, first to its employees, and then to the Internal Revenue Service.

 11. Both individual plaintiffs, Mrs. Cleveland and Mr. Cadwallader, filed on or before April 15, 1971, the statutory deadline, individual income tax returns for the tax year 1970, showing in full the wages which they had earned, and the amounts which had not been withheld by their employer. Both enclosed letters in which they stated their refusal to pay voluntarily the tax involved, and informed the Internal Revenue Service of their religious and conscientious reasons for such refusal.

 12. The Internal Revenue Service, by means of levies against the assets of both individual plaintiffs, subsequently collected the full amount of taxes due and owing from each of them, and collected as well interest at the rate of 6% per year, and a penalty at the rate of 1/2 of 1% per month.

 13. The AFSC has continued not to withhold the disputed amount of tax on the wages of the two individual plaintiffs, continuing to the date of trial in the case of Lorraine Cleveland, and to the time of his resignation for Leonard Cadwallader. In all cases, both individual plaintiffs have reported on their tax returns all wages earned, and all taxes due and not withheld, and in all such cases, the Internal Revenue Service has collected the amount of taxes not paid voluntarily, together with 6% annual interest and a penalty at the rate of 1/2 of 1% per month.

 14. The failure of the AFSC to withhold the taxes in question from the wages of the individual plaintiffs, and the consequent use by the government of levies to collect these taxes, has caused some additional difficulty or expense in collection. The issuance and service of a notice of levy is a regular and routine operation for the Internal Revenue Service and both the AFSC and the banks to which the Internal Revenue Service has looked for collection have honored the levies which have been served on them.

 16. However, the above 6% interest rate and penalty set forth in finding No. 15 above would not reimburse the government for collection costs which would result from use of the levy process in cases where small amounts of money are due the Internal Revenue Service.

 17. The AFSC's cessation of withholding of the proportion of taxes involved has substantially eased the burden on the consciences of the employees thereby affected; it has permitted them to face their government directly over the issue of whether they will pay voluntarily those of their taxes which are put to military and war purposes, and thereby permitted them to bear ...

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