War tax resistance for small business owners

Because funding war with our taxes suxxx ¯\_(ツ)_/¯

In my three years of war tax resistance coverage, the most common question I’ve gotten is: As a small business owner, can I become a war tax resister?

To refresh your memory, war tax resistance is the act of withholding the taxes you owe from the IRS to protest government spending on war and military operations, including ICE.

The War Tax Resisters League estimated that past and present military spending would consume 50% of the federal budget in fiscal year 2026.¹ This includes salaries of military personnel, weapons manufacturing for both the US and other countries, past military debt, and veterans’ benefits. Most war tax resisters choose to withhold 50% to 100% of the federal taxes they owe. In a guide published on January 31, I broke down this process step-by-step for employees with salaried jobs.

In this guide, I’ll cover the process for small business owners, including sole proprietors and single-member LLCs. I relied on three years of interviews with Lincoln Rice at the National War Tax Resistance Coordinating Committee (NWTRCC), and a recent interview with accountant Rae Trigg at RT Accounting Services.

Quick disclaimer: I sympathize deeply with people who oppose the actions of the US government but choose not to be war tax resisters. Getting scary letters from the IRS indefinitely? Constant paranoia that you’ll get audited or, worse, have your assets levied by the IRS? It sounds rough. So I get it. But I know there’s rising interest in the topic, and I want people to have as much information as possible as they decide whether or not to participate in this type of protest.

On Rae’s behalf: Rae does not feel strongly about whether or not people should become war tax resisters, but he has helped people change their withholdings on their W-4 and pay the least amount of quarterly estimated taxes (I describe this below as the medium risk option).

“I typically just give folks all of the information,” Rae says. “Personally, as a tax preparer, I cannot stop my withholding. Just legally, to renew my PTIN” – the Preparer Tax Identification Number, which tax professionals need to be able to stay in business – “I need to say that I am up to date on my taxes.”

The simple answer: Yes, business owners, sole proprietors, and freelancers can become war tax resisters – but you need to know the risks, and decide which ones feel right for you.

Lowest risk: Take advantage of as many tax write-offs as possible. Read last week’s guide on overlooked tax write-offs here. People using this option work with their accountant to find creative ways to write off more meals, travel, and other business expenses that lower their tax liability but stay within the letter of the law. As long as you file your taxes accurately, this option is completely legal.

Medium risk: Pay the smallest possible amount in quarterly estimated taxes. The IRS requires you to make quarterly payments that add up to 100% of the tax you owed the previous year. Rae Trigg of RT Accounting Services says, “A lot of our clients are in growth stages of business, or maybe they’re just starting out. Then next year, they’ll have income growth. In that case, folks’ initial thought is, ‘Well, if I’m making more, I’m gonna have to pay more in estimated tax payments.’ Because we have that rule where we can look at last year’s taxes, you might have made a lot less last year, so we can pay that bare minimum.”

For example, let’s say you owed $8,000 in taxes in 2025, but your business grows in 2026, so you expect to owe $16,000 in taxes in 2026. Typically, your accountant would advise you to pay $4,000 in quarterly estimated taxes to meet your expected 2026 tax obligations. But you are only legally required to pay $2,000 per quarter based on what you owed in taxes the year before.

Rae adds, “You are going to owe more taxes when it comes to the tax prep process, but you also didn’t give the government an interest-free loan. You could be putting that money in a savings account, which I usually recommend.”

Once you receive your tax bill for 2026, you can decide whether you want to pay the rest of the taxes you owe, or continue to withhold that money from the IRS.

Lincoln tells Queer and Trans Wealth, “A common practice among war tax resisters – especially because, traditionally, it’s been a more longer-term practice – is you would redirect those funds to show that you’re not doing it just so that you have more money for yourself. You’d redirect those funds to other organizations or groups that are not properly funded and doing excellent work.”

Highest risk: The riskiest option is to not pay or file taxes altogether.

Using this option, you wouldn’t make quarterly estimated tax payments at all. Ideally, you’ll choose to redirect the taxes you owe to organizations that oppose the US military. It’s not uncommon for small business owners to be behind on their taxes: 22% of small business owners owed the IRS taxes in 2021, according to Tax Guard, a company that provides IRS data services. Since it’s fairly normal for small businesses to be behind on their taxes, you would most likely be able to resist paying taxes for some time before the IRS start getting serious about making you pay up. More on this below.

If you choose not to file your tax return, the IRS can file a return on your behalf at any time, since,there’s no statute of limitations on unfiled tax returns. If that happens, the IRS can determine how much you owe and add penalties and interest to your tax debt.

Other frequently asked questions

What are the penalties for not paying my taxes?

The Failure to Pay penalty is 0.5% of unpaid taxes and accrued interest each month. The total penalty cannot exceed 25% of your original tax debt. According to the IRS, the interest rate for underpaying your taxes is 7% in 2026, and that interest compounds daily.

Lincoln of NWTRCC says that some war tax resisters see their debt double over time because even with the limits on penalties, interest on their debt continues to compound.

What’s the difference between withholding my taxes as a business owner vs. as an individual?

It’s easier to become a war tax resister as a small business owner. Employees who receive a salary from a corporation generally have their taxes withheld, meaning they are taken out of their paycheck before it hits their bank account. That makes it impossible to withhold their taxes to protest war and military spending.

On the other hand, small business owners pay taxes to the IRS after receiving payments from clients and customers. Because your taxes aren’t automatically deducted from your pay, this makes it simpler to resist taxes: you can withhold your taxes by paying less than what you owe.

Can the IRS close my business if I choose not to pay my tax debts?

Yes, the IRS can technically close your business, but it’s rare.² The IRS will only close a business for “extreme criminal noncompliance,” including fraud.

Lincoln told us an example of a business owner in Wisconsin who is very open about her war tax resistance. “She’d had a car of hers taken in the ‘80s, which used to be much more common. The IRS rarely takes any piece of property now, but they were so much more aggressive in the ‘70s, ‘80s, and ‘90s. When she met with [the IRS], she asked, ‘Would you consider taking my car now?’ She is a doctor who drove around and provided her doctor services at rural clinics, so she needed her car. And [the IRS’] response was, ‘Well, if we take your car, how will you work?’”

Ironically, the Trump administration is making it easier for you to resist taxes: it’s steadily cutting funding for the IRS, so there are fewer people reviewing tax returns from small business owners. In most cases, the IRS is more likely to put a lien or levy on your assets than fully close your business.

Will the IRS seize my home, car, or business assets if I don’t pay the taxes I owe?

It’s rare, and, even if it does happen, it wouldn’t happen right away, says Lincoln at NWTRCC. Lincoln says fewer than 10 of the war tax resisters networked through NWTRCC have had their assets seized since 2023. The people whose assets were seized are long-term war tax resisters who have been withholding their taxes for over a decade.

If you decide to withhold your taxes, at first, you’ll receive computer-generated letters from the IRS pressuring you to pay your tax debt.

If you don’t pay after receiving these letters, the IRS may put a lien on your account. A lien is a legal claim on your assets to push you to pay the taxes you owe. It’s a legal document that says the IRS can seize your property if you don’t pay back your tax debt after a certain period of time. A lien negatively affects your credit and your ability to buy and sell property.

If you still don’t pay your taxes owed after that, the IRS can levy your bank accounts, investment accounts, and social security benefits. A levy is a legal seizure of your assets to satisfy a tax debt.

What if I have business partners?

Lincoln of NWTRCC says he doesn’t have much experience with this specific situation, but tax resistance by one partner could affect the entire business. “If you own, say, 25% or 50% of [the business] with one or more people, it definitely could lead to all the business’s assets, including the joint bank account, being at risk of a levy,” he says.

If you’re interested in this form of protest and you’re a partner in a business, Lincoln recommends meeting with a lawyer who can help you separate your business and personal finances, allowing you to become a war tax resister as an individual instead of as a business.

Drop any questions you have in the comments 👇

1. Based on stated Republican goals as of March 2025. https://www.warresisters.org/wp-content/uploads/2025/03/FY2026-pie-chart-for-web.pdf

2. Sourced from the following legal blogs: Dallas Tax Attorney, Seattle Legal Services PLLC, The Greene Law Firm PA