“"[T]he doctrine of sovereign immunity is not a constitutional right; it is a common law theory or defense established by [our Supreme] Court.... Thus, when there is a clash between these constitutional rights and sovereign immunity, the constitutional rights must prevail." Id. at 786, 413 S.E.2d at 292. Every expropriation of a citizen's fruits of his or her labor by the government is a taking, whether through taxation or by the power of eminent domain. However, of all rights enumerated in our constitutions, only the taking of an individual's property rights by the sovereign for public use requires remuneration. This right "was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States , 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554, 1561 (1960).”
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“Every expropriation of a citizen's fruits of his or her labor by the government is a taking, whether through taxation or by the power of eminent domain.”
[Beroth Oil Co. v. N.C. Dep't of Transp., 256 N.C. App. 401, 414-15 (N.C. Ct. App. 2017) ]
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“Applying that rule to this case, the Commissioner urges that the act of appropriating the property of another to one's own use is an exercise of a major power of ownership even though the act is consciously and entirely wrongful. As against all the world except the true owner the embezzler is the legal owner, at least while he remains in possession. The money or property acquired in this unlawful manner, it is said, should therefore betreated as taxable income to the wrongdoer under Section 22(a). ”)
[Commissioner v. Wilcox, 327 U.S. 404, 407 (1946)]
[EDITORIAL: "As against all the world except the true owner the embezzler is the legal owner, at least while he remains in possession. "
Apply this to IRS holding money your employer "embezzled" from your paychecks and handed over under the guise of fulfiling legal obligations. In fact, once the funds are withheld from you, the employer IS legally obligated to hand over the funds to the IRS. Only if the employer determines there has been a MISTAKE and that he should NOT have withheld the funds could he lawfully refuse to hand over the funds to the IRS, and by virtue of recognizing that mistake, the employer at the same time is obligated legally to return the funds to the RIGHTFUL owner, i.e. the worker who earned those funds.
Once the funds are handed off to the IRS, the employee share of FICA withholding can be recovered from the IRS by the employer but NOT the Subtitle A income tax withholding.
Since the employer no longer has your income tax withholding (unless he does)— although you can sue him to recover your withheld funds, it makes more sense to attempt first to recover the refund from the IRS. Especially if your employer agrees (expressly or tacitly, by his silence) that he did not have any legal basis for withholding those funds. But only if one claimed exempt or otherwise established that one did not agree to any withholding BEFOREHAND could one maintain a claim of fault against the employer. The W-4 primarily is used to establish a record of MUTUAL AGREEMENT that the payments constitute "wages" and if you do not disagree at the time, there is a MUTUAL mistake of law that makes it harder for you to claim the withholding was WRONGFUL.]
"The withheld sums become "prepaid income tax" when received by the Treasury Department and are refundable to the taxpayer-employee, not to the withholding employer. Cf. 26 U.S.C. § 6513(b). Because § 1346 is a waiver of sovereign immunity, it must be narrowly construed. Phillips v. United States, supra. If the amount claimed was wrongfully assessed and collected, the employees, not the Church, would be entitled to sue. The Church is not the taxpayer entitled to "recovery" and accordingly the district court did not have jurisdiction under § 1346(a)(1).”
[Eighth Street Baptist Ch. v. United States, 431 F.2d 1193, 1194 (10th Cir. 1970)]