The Australian Tax Office is pursuing Hutt River Province in rural WA for $2.6 million, serving a Supreme Court writ on its self-appointed "royal" family.
Graeme Casley, who will become the 75 square kilometre principality's monarch when his father Prince Leonard abdicates on February 11, said a bailiff delivered the papers to the privately-owned wheat property north of Geraldton on Wednesday afternoon.
Prince Graeme said the ATO had "guesstimated" how much money the principality - which claims to be an independent sovereign state that seceded from Australia in 1970 - earns from tourists who trickle in every day.
"For coming up to 47 years now, they seem to ignore us and hope we go away, but every now and again, various politicians come to town and want to flex their muscles and put some government agency onto us," he told AAP.
"I believe it would be of mutual benefit if we could just sit around the table and work out some understanding or some more harmonious situation.
"No one wants to have angry neighbours, even if they're in Canberra."
Prince Graeme says diplomatic efforts have not stopped the case proceeding, so he will travel to Perth with his 91-year-old father, who has previously lectured on constitutional law, to represent themselves in court.
"We found in the past when we have employed barristers and lawyers they're bonded to the system so some of them don't fight as hard as we would like," he said.
"Dad's had a few of these (cases) over the 47 years and it's not something he wanted at 91 years of age ... but he's quite able to step forward.
"If we could find a lawyer or barrister that had our conviction, we'd certainly love assistance - we're not pushing assistance aside.
"All sorts of interesting legal precedents are about to unfold."
Prince Graeme said a court judgment in 1980 exempted all souvenirs, postage stamps and currency sold by the principality from tax, but around mid last year, the ATO decided to suddenly ignore that ruling.
The principality had sought an import-export treaty, and a tax exemption on goods it buys from outside such as farm equipment and also fuel excise, but had been knocked back.
He said the figure the ATO claimed it was owed was rising daily with interest, fines and penalties.
Prince Graeme said he didn't expect useful support from anyone in the political sphere over the case.
"We don't feel an affinity with anyone in West Australian or Australian politics but from time-to-time we've had friendly senators who were empathetic to our cause."
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