Question:
Is paying taxes merely a civil obligation because the law of the land requires it, or is it also a halachic obligation whose violation may constitute theft? What is the dispute among the Poskim regarding tax evasion, and what is the practical ruling?
Answer:
The overwhelming consensus of the Poskim is that one must pay legally imposed taxes. Nonetheless, there is a well-known dispute regarding the precise nature of the prohibition involved when one evades taxes.
According to many Rishonim and Poskim, tax evasion is not merely a violation of secular law. Rather, once the government has the legal authority to levy taxes, the money owed belongs to the government, and withholding it constitutes actual theft. The Rambam and Shulchan Aruch rule that one who evades a legitimate tax is stealing the king’s due, whether the king is Jewish or non-Jewish.
However, some Rishonim understood tax evasion differently. Rashi, the Rosh, and the Ran compare certain forms of unpaid taxes to hafka’as halva’aso, withholding payment of a debt owed to a non-Jew, rather than classic theft. According to this approach, in the absence of deception and chilul Hashem, tax evasion would not necessarily constitute the Biblical prohibition of theft.
This dispute is brought by the Alter Rebbe. In Hilchos Gezeilah, he records both opinions. Some Poskim prohibit tax evasion as actual theft, while others view it as comparable to hafka’as halva’aso. Nevertheless, the Alter Rebbe concludes that a Yerei Shamayim should be stringent, as there is a possibility that avoiding taxes violates a Biblical prohibition.
The rationale behind the stringent position is particularly compelling in modern states. A person resides in a country, benefits from its roads, police, courts, emergency services, infrastructure, and public protections, and in exchange the government requires payment of taxes. The government has the legal authority to impose those obligations and, if necessary, even remove from the country those who refuse to abide by its laws. Accordingly, many Poskim understand tax evasion as actual theft of services and benefits from the public and from fellow taxpayers who are forced to make up the difference.
Indeed, several contemporary Poskim explain that in modern democracies the tax funds are not merely going into a king’s personal treasury. Rather, they are used for the benefit of the residents themselves. Therefore, one who enjoys those services while refusing to contribute his share is effectively taking from the public.
Furthermore, even according to the more lenient opinions, any tax evasion that involves misrepresentation, false reporting, forged records, or deceit would be prohibited because it involves lying, fraud, and often chilul Hashem. The Alter Rebbe’s discussion concerns the theoretical status of unpaid taxes, not permission to falsify information.
Practically, the accepted ruling is to pay all taxes required by law. Since there is a substantial possibility that tax evasion constitutes a Biblical prohibition of theft, the rule of safek de’oraisa lechumra applies. Accordingly, one is not to engage in tax evasion. This is certainly the accepted Chabad practice and the approach reflected in the rulings and conduct of our Rabbeim.
An illustration of the Rebbe’s meticulousness in these matters is found in a well-known story involving Rabbi Yehuda Krinsky. A purchase was made without sales tax under a tax-exempt arrangement. When the Rebbe learned that the item was for personal use rather than for the institution, he instructed that the matter be corrected and that the required tax be paid.
Likewise, the Rebbe records in a letter the longstanding Chabad practice of avoiding even the circumvention of official postal fees. It notes that the Tzemach Tzedek would arrange for the equivalent postage payment even when sending correspondence through a traveler rather than through the postal service, demonstrating the care taken by our Rabbeim regarding governmental charges and fees.
Conclusion:
While some Poskim understood certain forms of unpaid taxes as hafka’as halva’aso rather than outright theft, the Rambam, Shulchan Aruch, and many later authorities view tax evasion as actual theft. The Alter Rebbe records both opinions but concludes that a G-d-fearing person should be stringent because of the possibility of a Biblical prohibition. Accordingly, one should fully comply with tax laws and avoid any form of tax evasion.
Sources:
Shulchan Aruch Harav Hilchos Gezeilah 15; Shulchan Aruch Choshen Mishpat 369:6-7; Rambam Hilchos Gezeilah 5:11-14; Igros Moshe Choshen Mishpat 1:88; Shevet Halevi 2:58; Teshuvos V’Hanhagos 3:476, 4:319; Mishneh Halachos 12:445, 17:125; Yechaveh Daas 5:64; Yaskil Avdi 6 C.M. 28; Netzach Yisrael 33; Minchas Shlomo to Nedarim 28a; Igros Kodesh 11:1367; 15:451