15. The 6% annual interest rate and the 1/2 of 1% per month penalty are calculated at a rate to place the taxpayer in the same position as those who voluntarily pay their taxes at the required times and to reimburse the government for any collection costs which it might incur in resorting to the levy process.
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 witness to their beliefs as their most deeply held religious convictions require them to do.
18. The cessation of withholding by the AFSC has likewise substantially relieved the earlier pressures on AFSC from its other employees and contributors, who were concerned with AFSC's role in the involuntary collection of war taxes from its employees; it has likewise reduced the burden of conscience borne by the AFSC itself as an organization in interfering with the expression of the religious and conscientious beliefs of its employees.
19. The figure of 51.6% as the proportion of the federal budget expended for military and war purposes is based on a computation by the Friends Committee on National Legislation of actual appropriations made by the Congress in the calendar year 1968. The computation and analysis is set forth in detail, with accompanying tables and charts, in the December, 1968, issue of the FCNL "Washington Newsletter." Miss Frances Neely, legislative secretary of FCNL, testified on the research and statistical analysis which is annually performed by FCNL researchers, and which was performed for the calendar year 1968, in arriving at the figures reported in the Newsletter. The figure represents a reasonable, rational and fair percentage amount which can be used to determine the proportion of the individual plaintiffs' taxes which are spent for purposes to which they conscientiously object.
20. The government has an interest in maintaining a uniform, efficient and orderly method of collecting federal income taxes.
21. The collection of such taxes by means of the withholding method is the most efficient means of collection devised by the government to accomplish the objectives set forth in finding No. 20 above.
This case is one of first impression and presents us with several difficult questions under the First Amendment of the United States Constitution dealing with the free exercise of religion.
Jurisdiction over the subject matter does exist pursuant to 28 U.S.C. § 1331(a) with respect to the individual plaintiffs Lorraine Cleveland and Leonard Cadwallader, and 28 U.S.C. § 1346(a) (1) gives us subject matter jurisdiction over the refund claim of the AFSC. The complaint alleges that with respect to the two individual named plaintiffs, the amount involved in this particular controversy exceeds the sum of $10,000 exclusive of interest and costs.
Plaintiffs Cleveland and Cadwallader each have standing to attack the withholding method of collecting their taxes because such method of collection directly forecloses their ability to freely express their opposition to the participation in war in any form, which opposition is a vital and fundamental part of their religious practice as Quakers. Section 7421(a)
of the Internal Revenue Code of 1954 does not bar the suit by plaintiffs Cleveland and Cadwallader because they do not seek to restrain "the assessment or collection of any tax" but rather are contesting only the method of collection utilized by the Internal Revenue Service as it applies to the admittedly unique facts of this case. The government argues that plaintiffs Cleveland and Cadwallader are indeed attempting to enjoin the collection of a portion of their federal income taxes by means of employer withholding and that the attack by plaintiffs on the method of collection only, rather than on the collection of the tax itself, is simply a distinction without a difference.
The government relies on Enochs v. Williams Packing Co., 370 U.S. 1, 8 L. Ed. 2d 292, 82 S. Ct. 1125 (1962) for the proposition that § 7421(a) bars a suit in this case. However, a close reading of Enochs discloses that § 7421(a) was not intended to foreclose the kind of constitutional inquiry which presently confronts this Court.
"The manifest purpose of § 7421(a) is to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund." 370 U.S. at 7.