United States v. Lee

Background

An Amish farmer and carpenter employed other Amish workers from 1970 to 1977. He did not withhold his employees’ Social Security contributions or pay the employer’s share of Social Security and unemployment taxes. After the IRS assessed more than $27,000 in unpaid employment taxes, he paid $91 and sued for a refund, claiming that paying or accepting Social Security benefits violates his and his workers’ religious beliefs. The federal district court sided with him and exempted him under the Free Exercise Clause.

Reasoning

The Supreme Court accepted that the Amish sincerely believe both paying and receiving Social Security benefits violate their faith. But the Court held that the national Social Security system depends on mandatory, uniform contributions by employers and employees and that Congress already made a narrow exemption for self-employed members of certain religions. Allowing an employer-wide religious exemption would impose the employer’s faith on employees and would threaten the fiscal and administrative integrity of the national tax and benefit system. Because Congress had confined exemptions to the self-employed, the Court reversed the lower court.

Real world impact

Employers who object to Social Security on religious grounds cannot claim a constitutional exemption to avoid paying employer taxes. Congress remains free to enact or extend statutory exemptions for particular groups, but the Court will not create broad, constitutionally required tax exemptions. The case was reversed and remanded for further proceedings consistent with this opinion.

Dissents or concurrances

Justice Stevens agreed with the result but wrote separately, arguing the objector should bear a heavier burden and that extending statutory exemptions might be administrable and have little fiscal cost.