Dean Allen Steeves has been rather active in federal court for the last few years. There was one case filed in the Court of Federal Claims in 2019. Starting in 2020 there have been twenty cases in either the California Southern District Court or the Court of Appeals for the Ninth Circuit. In three of the cases Steeves was acting on behalf of Brothers Keeper Ministries (BKM). BKM is a “non-organization private-sector church”. Several of the cases involve Camp Noble Inc, a substantial business that Steeves purports is an integrated auxiliary of BKM.
The Stakes Over $16 Million
The case that is still open is Dean Steeves v. United States of America in the United States District Court Southern District of California 3:26-cv-00568-BAS-VET. It is a petition to quash an IRS summons. That is a theme of a few of the other actions. What is different about this one is that Steeves is represented rather than pro se. The petition comes from Paul C. Fricke of Fricke & Barnes Law. Not only that, he has somebody representing him before the IRS to seek a collection due process hearing. That would be Michael Wells, a Senior Tax Specialist at Leading Tax Group.
At any rate the attachments to their filing show us what the stakes are. There are unpaid balance of assessments for Form 1120 for Camp Noble Inc for the years 2008 through 2018 totaling $7,042,248. For Steeves personally, there are assessments and statutory additions for Form 1040 from 2011 through 2023 totaling $9,548,509.
The Form 12153 (Request for a Collection Due Process or Equivalent Hearing) for Steeves checks two boxes not liable for tax and unable to pay due to financial hardship.
The summons was apparently to Steeves from the agent working the collection case and the argument is that it was inappropriate while the request for a collection due process hearing is pending.
The Arguments
Steeves has been overall unsuccessful in the cases he has been bringing. He seems to lose them on procedural or technical issues. The merits of the arguments that he raises against the tax are never addressed. A good example of the process is seen in Steeves v Nelson 3:21-cv-01265-CAB-MSB. The complaint is a Motion To Compel IRS Revenue Officer to Respond to Plaintiff’s Letter of Demand. Steeves states that Dorothy Nelson has issued a fraudulent tax liability assessment to him for the years 2009 to 2013. According to Steeves, Nelson fabricated the false assessment using funds that are the property of BKM. He sent her a letter instructing her to respond with the “legislated Law” she assumes authorized her to issue the assessment. He wrote that if she failed to respond in ten days he would file for a motion to compel.
Judge Cathy Ann Bencivengo made short work of the complaint with an order issued on September 23, 2021. Here are the high points:
“Absent from the motion is any allegation or explanation of why Defendant had a duty to Plaintiff to his demand letter.”
“After reviewing Plaintiff’s response to the order to show cause, the Court finds that Plaintiff has not satisfied his burden to establish that this Court has subject matter jurisdiction.”
Having read the various briefs and complaints I would summarize the two arguments that Steeves lays out as being that everything that he and Camp Noble Inc earn really belongs to BKM, which exempts it, because BKM is a church and that the income tax as commonly understood is unconstitutional. Let’s look at each of them.
The Church
I was not able to find anything about Brothers Keeper Ministries (a Private Mandatory Tax-Excepted Self-Supporting Ministry/Church). I wrote Steeves asking if BKM held services. He responded:
“As I said, BKM is PRIVATE. We live our mission 24/7. Our mission to see the world revalued is our 24/7 services.”
The term “church” is not defined in the Code or regulations. The IRS has publicized the factors that it considers in determining whether an entity that purports to be a church is one for tax purposes.
-
Distinct legal existence
-
Recognized creed and form of worship
-
Definite and distinct ecclesiastical government
-
Formal code of doctrine and discipline
-
Distinct religious history
-
Membership not associated with any other church or denomination
-
Organization of ordained ministers
-
Ordained ministers selected after completing prescribed courses of study
-
Literature of its own
-
Established places of worship
-
Regular congregations
-
Regular religious services
-
Sunday schools for the religious instruction of the young
-
Schools for the preparation of its members
This troubles me a bit. I don’t think Jesus and his disciples would have scored that well. Why should the IRS be defining what a church is? Professor Edward Zelinsky explains it all in Taxing the Church: Religion Exemptions, Entanglement and the Constitution, which I reviewed here.
“Either taxing or exempting churches and other sectarian entities entangles church and state.In the tax context, there are no disentangling alternatives. Taxing churches results in enforcement entanglement as the tax collector collects revenue from religious taxpayers, often by intrusive means, and as taxpayers comply with their obligations to pay tax. Exempting churches causes borderline entanglement as churches and other sectarian actors claim the coverage of tax exemption while tax collectors and the courts police the boundaries of exemption and sometimes reject those claims.”
Regardless, I don’t see evidence that BKM scores well on any of the 14 factors, but that is not the only problem. Churches have substantial tax advantages, but they are not as absolute as Steeves makes out in this filing which states that a
” a Private MInistry/Church and its “integrated auxiliary entities” are Mandatorily Excepted from any and all requirements to file or report anything to the IRS”
A church does not have to apply for 501(c)(3) status and effectively has it automatically and unlike other not for profits it does not have to file Form 990. A church is not, however, exempt from the tax on unrelated business taxable income. And Camp Noble Inc is a business. Here is what how Camp Noble Inc describes itself.
“Camp Noble Inc dba 3-D Marketing (002L0) is a manufacturer of top quality standard and custom electrical solutions supporting a vast array of applications for the US DoD and its Prime Contractors. As a turnkey provider with considerable industry experience our manufacturing and design team work closely to ensure specific project requirements are identified and needs are met.”
The Constitution
Steeves believes the income tax is unconstitutional and has promised me an article explaining his position. He wrote me:
“The federal income tax is unconstitutional and unlawful for reasons that do not relate directly to BKM and CNI; however, both BKM and CNI are lawfully tax-excepted not tax-exempt (government privilege). In essence, the government, by attacking CNI, is stating PRIVACY is illegal (not permitted).
My article shows why the federal income tax is unconstitutional and unlawful, as the Framers never granted the government the power to tax income.
All my talk about the federal income tax is in my article, which I will send you a copy of when completed.”
I am really looking forward to the article and maybe should leave it at that. There is an argument laid out in this 2024 filing by Brothers Keeper. You can check it out for yourself. It does seem a bit like Peter Hendrickson’s “cracking the code” arguments that when you read Brushaber you get that the income tax is an excise tax that only applies to certain activities. I have generally found that independent tax thinkers tend to be somewhat attached to their particular variety of special sauce.
I believe that IRS may have contributed somewhat to these interpretations by misreading Brushaber, which I discuss here.
Why This Is Significant
What I find significant about the struggle of Dean Allen Steeves is his seemingly indefatigable nature and the high amount at stake. I hope to be able to share this fully fleshed out theory before long.
————————————————————————————————————————————————————