Auto Worker Dean Hazel Leads a Tax Revolt, but the I.R.S. Is Convinced It Has His Number

UPDATED 04/06/1981 at 01:00 AM EST Originally published 04/06/1981 at 01:00 AM EST

Dean Hazel makes $9.35 an hour bolting truck bodies to chassis on a GM assembly line in Pontiac, Mich. Yet the most riveting aspect of his work doesn't involve earning income, but protecting it—from the tax man. Hazel, 28, co-founded the 800-member We the People A.C.T. (American Citizens Tribunal), a group that since January 1980 has been fomenting a tax revolt among auto industry workers in southeast Michigan. We the People, part of a coalition of similar-thinking groups across the nation, contends that the income tax on wages is unconstitutional. Thus far an estimated 5,000 workers in the area have joined in the rebellion.

For starters, some protesters have merely written "Unconstitutional!" on their filed 1040s, or claimed an excessive number of exemptions (some have listed as many as 99 "dependents"). When their requests for the exemptions have been denied by the Internal Revenue Service, they have simply made out new applications. The shuffling of papers could have continued for years. Hazel justifies these actions with a quixotic interpretation of the Constitution. "Not everything Congress cares to call income can be taxed as income," he insists. "For example, wages. Labor is an individual's personal property and he trades it to an employer for wages. It's an even swap, not income. Therefore it isn't taxable."

Most tax experts consider Hazel's reasoning specious. L. Hart Wright, a University of Michigan law professor, says any attorney advancing such an argument "would be laughed out of court. The Supreme Court has, time and time again, treated the income tax act as constitutional." President Douglas Fraser of the United Auto Workers, many of whose members support Hazel, regrets that the tax-rebel leaders are "basically misleading people into thinking they can get away with it. Innocent people will wind up going to jail."

But Hazel boasts, "There's safety in numbers." Still, he admits, "The IRS is interested in ringleaders"—specifically in him. He hasn't filed a federal tax return since 1977 and claims, under a clause contained in the W-4 form, that he is exempt from paying taxes because he had no tax liability the previous year and anticipates none in the current year. If charged and convicted of willfully filing a false withholding statement, he could face a maximum of one year in prison and a $500 fine; willful failure to file a tax return could cost him $10,000 and one year in prison.

The IRS has reacted swiftly to snuff out the uprising, which has spread as the April 15 filing deadline approaches. Two weeks ago the Service issued a temporary regulation (to be made permanent later) ordering employers to notify the IRS of workers claiming more than nine exemptions. If the IRS finds such claims to be unjustified, the employer will be told the proper number to withhold, and no change can be made without the permission of the IRS. On March 11 James Lott, a tool-and-die maker who co-founded We the People, and three other Michigan workers were indicted on a total of 42 counts of tax evasion and fraud, partly involving their W-4 forms. Will the IRS take further action? "Sure," a Washington, D.C. spokesman maintains. "And the new regulation will completely nullify the protest."

Hazel, the son of a Pontiac school principal, was a fair student ("I just wanted to be accepted, not above average") who daydreamed of a law career but didn't want to go to college. He joined GM at the age of 20 in 1973.

A bachelor living alone, Hazel got his tax-mutiny idea from a radio talk show two years ago. He read up on the subject and, after hearing other plant workers tell of not filing returns, helped found We the People in a local storefront. Hazel draws no salary from the group, but he has spent $2,000 of his own money to finance meetings, pamphlets and lectures. His campaign has also cost him a girlfriend who, he reports, "complained that all I ever talked about was taxes, taxes, taxes!"

Hazel feels it's worth the price. "Things are way out of hand in this country," he philosophizes. "People are taxed so heavily it's become a crummy country." Is his role as David against the IRS Goliath uncomfortable? "Sure," he says. "I'm scared to do what I'm doing; but I'd be more scared not to."

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