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. § 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. § 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 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
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, 102 S.Ct. 1051, 71 L.Ed.2d 127 (1982), and other case law preceding Employment Division v. Smith, 494 U.S. 872, 110 S.Ct. 1595, 108 L.Ed.2d 876 (1990). Adams now appeals to this court. We have jurisdiction pursuant to 26 U.S.C. § 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).
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, 521 U.S. 507, 117 S.Ct. 2157, 138 L.Ed.2d 624 (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 constitutional as applied to the federal government. See Alamo v. Clay, 137 F.3d 1366, 1367 (D.C.Cir.1998).
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
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, 110 S.Ct. 1595; 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 § 2000bb-1; Small v. Lehman, 98 F.3d 762, 767 (3d Cir.1996), overruled by 521 U.S. 507, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997).
In enacting RFRA, Congress specifically announced its intent to "restore" the "compelling interest" test set forth in Sherbert v. Verner and Wisconsin v. Yoder:
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 § 2000bb(a); § 2000bb-2; S.Rep. No. 103-111 (1993), at 5-9, 15-16, reprinted in 1993 U.S.C.C.A.N. 1892, 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.
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, 1993 U.S.C.C.A.N. at 1897-98.
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:
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); Autenrieth 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.1986); 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).
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 WL 88184 (1998), citing Hernandez, 490 U.S. at 699-700, 109 S.Ct. 2136; Lee, 455 U.S. at 260, 102 S.Ct. 1051. Adams argues that the tax court misconstrued the compelling interest, and did so in so broad a manner, that the court did not address the "least restrictive means" prong. She contends that the government
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, 102 S.Ct. 1051. 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, 102 S.Ct. 1051. 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 court created exemptions to the income tax system. See Lee, 455 U.S. at 259, 102 S.Ct. 1051; 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 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, 520 U.S. 1156, 117 S.Ct. 1335, 137 L.Ed.2d 495 (1997), overruled by 521 U.S. 507, 117 S.Ct. 2157, 138 L.Ed.2d 624. 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 Autenrieth, 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:
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 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, 54 S.Ct. 788, 78 L.Ed. 1348 (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.
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. § 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.
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, ___ U.S. ___, 118 S.Ct. 1388, 140 L.Ed.2d 647 (1998) (listing cases); Webster v. United States, 179 Ct.Cl. 697, 375 F.2d 814 (1967) (finding a reasonable cause exception due to changes in tax code and taxpayer's lack of information as rural landowner).
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 well established 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
We will affirm the decision of the Tax Court.
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?
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).