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Legal Notes

A collection of observations for the benefit of those wanting to file proper, educated tax returns

 

General Considerations In The Filing Of Educated And Accurate Returns

THE FOLLOWING IS A SUMMARY of some basic concepts and issues related to filing knowledgeable, accurate and proper tax instruments. Each point or observation may or may not have relevance to any particular person's situation, and I suggest everyone read through them all. More particularized considerations will be found further down this page.

1. If "information returns" by a payer (i.e., W-2s, 1099s, K-1s) make what are believed to be erroneous allegations of the payment of "wages", "non-employee-compensation" or other revenue purportedly in connection with the conduct of an "income-taxable" activity, a filing intended to be true, complete and correct would seek to rebut the erroneous allegations and provide what the filer believes to be the correct amounts. This might be done by, for instance:

A. Attaching sworn statements specifically rebutting the errors on those forms with correct entries to one's federal (and/or state and local) 1040. Examples are Forms 4852 (to rebut and replace errant W-2s or 1099-Rs), or photocopies of errant original 1099-MISCs (or any other type of 1099 other than the 1099-R) with correct information replacing incorrect entries, and a sworn statement added declaring the instrument to be a rebuttal of an erroneous 1099-(xx) known to have been submitted by the listed payer.

and...

B. Using the rebuttal instruments as replacements for the erroneous "information returns" and the correct information from the rebutting instruments to complete one's 1040. For instance, if one has received erroneous W-2s and has created a rebutting 4852, where a 1040 asks for "wages received" and says to attach a W-2, one would declare the "wage" entry from line 7(a) of the 4852, and attach that form instead of the erroneous W-2.

Instruments rebutting erroneous 1099s (other than 1099-Rs) are attached to the return by themselves-- that is, not with some kind of schedule-- unless one really IS operating some kind of tax-relevant business or other activity, and one is acknowledging having had SOME "trade or business" "income", but just a different amount than what was reported on the erroneous 1099.

• If one engaged in no tax-relevant activities during the year there are likely no schedules that are appropriate for one's filing (unless, I suppose, one has something being carried over from a previous year in which something taxable WAS done...).

• If erroneous forms were included with a filing in which those erroneous forms are rebutted it would cause a contradiction in entries and make the return invalid and "frivolous", since everything included with a return is presumed to be attested to as correct by the filer.

• Failing to combine all amounts withheld as or for any kind of federal tax as a single figure on the line designated for "Federal income tax withheld", and/or failing to include and claim back any withheld amount while claiming back other amounts, is to create an apparent contradiction.

For instance, to report $0 "wages" and claim back amounts listed as withheld on a W-2 or 4852 as nominal "federal income tax" but to not also claim back amounts withheld as "Social Security tax" and "Medicare tax" would be to declare oneself to have not received "wages" as defined in 26 USC 3401(a) but to HAVE received "wages" as defined in 3121(a). Since both designations of "wages" refer to the same receipts and activities which produce them (with the latter being merely a surtax on a portion of the former) the declarations are contradictory of each other.

The same contradiction would arise if one listed anything as "Excess social security and tier 1 RRTA tax withheld", while denying having received 3121(a) "wages". One can only have "excess SS tax withheld" if one has had "SS tax" properly withheld up to the amount at which anything further becomes "excess".

2. A return is NOT an appropriate document for making legal arguments of any kind. To include a cover letter explaining what is seen in the return (such as that erroneous "information returns" have been rebutted with instruments completed and attached for that purpose) does no harm, but this is neither the time nor the place to be making assertions about whether one is or isn't an "employee", arguments about the nature of the tax, assertions that rebutted "information returns" contain "Bad Payer Data" and so forth. A return is just a statement of the amounts one knows and believes to be true, complete and correct in regard to each item inquired-about on the 1040, properly-understood as to its statutory meaning. It's neither a soap-box nor a legal brief; further, some kinds of arguments can actually invite a "frivolous" assertion.

3. Amounts improperly or erroneously collected, withheld, paid-in, what-have-you can only be claimed for refund looking back three years. On the other hand, rebuttals/corrections of erroneous assertions for their own sake, or as a response to collections efforts based on erroneous information returns, have no look-back limit. Learn more about both issues here.

4. Returns varying from (or attempting to supplement) the principles and points listed here, and/or reflecting notions not presented in CtC or on this site (exclusive of forum pages)-- such as adding "UCC" references to jurats, or otherwise marking-up or adding-to a return-- invite problems. I believe such variations are sometimes seen as reflecting an uncertainty (and therefore an insincerity) about one's filing, which can create a pretext for treating a return as "frivolous" and invalid. They also make one appear to be a soft target for harassment, ill-equipped to stand one's ground and deal competently with pushback, which is therefore more likely to be attempted.

5. Most all of the above has long been posted amongst much other useful material on the FAQ pages. Make a point of staying up to date with those pages, and everything linked from the Site Map!!

6. For those new to filing educated returns and claims, the Bulletin Board has well over a thousand victories posted, hundreds of which include not only the check or notice or transcript, but also everything filed to make it happen. Examining any given half-dozen of these complete filings should equip anyone with a pretty clear picture of what's involved and what to do.

What Qualifies As Income-Taxable Privilege

*****

An Educated Filer's Checklist

Another helpful resource for first-time warriors for the rule of law, and a good refresher for veterans.

SO, YOU'VE DONE YOUR CAREFUL STUDY OF THE BOOK, and pored over the FAQs, legal notes and special-topic postings. "Information return(s)" erroneously characterizing payments made to you as being tax-relevant have arrived, or you've got money that was improperly paid-in or withheld to reclaim (or both). You're getting ready to file that first educated tax return.

Despite the best preparation, even someone with a solid grasp of the whole picture can still find his debut educated filing to be an anxious and drawn-out chore, if only for the heightened focus on getting everything right. And perversely, anxiety can lead to mistakes.

With this in mind, I offer the handy checklist below to this coming year's "newbies". It is my hope that it will reduce the anxiety and help make that first educated return more like the simple fifteen-minute affair that it is to veterans.

FOR "W-2-REBUTTING" FILERS:

1. Did I scrupulously verify and transcribe whatever is correct on each W-2 received to a corresponding spot on a Form 4852, and did I report what I believe to be correct in every place on the Form 4852 that corresponds to any incorrect entry on the W-2?

2. [For federal filings] Did I add up all amounts withheld and sent to the feds as taxes on income, whether under the names of "federal income tax", Social security tax or Medicare tax, and include them on the line of the 1040 for reporting the amount of federal income tax withheld?

3. [For state filings] Did I report the amount withheld as tax and sent to my state on the line of my state return for reporting the amount of income tax withheld?

4. Did I answer the questions on the Form(s) 4852 succinctly, factually and without arguments?

5. Did I carefully NOT attach the W-2(s) being rebutted to my filing, but carefully attach the Form(s) 4852 as substitutes for those at least partially-erroneous W-2(s)?

FOR "1099-R-REBUTTING" FILERS:

1. Did I scrupulously verify and transcribe whatever is correct on each 1099-R received to a corresponding spot on a Form 4852, and did I report what I believe to be correct in every place on the Form 4852 that corresponds to any incorrect entry on the 1099-R?

2. [For federal filings] Did I add up all amounts withheld and sent to the feds as taxes on income, whether under the names of "federal income tax", Social security tax or Medicare tax, and include them on the line of the 1040 for reporting the amount of federal income tax withheld?

3. [For state filings] Did I report the amount withheld as tax and sent to my state on the line of my state return for reporting the amount of income tax withheld?

4. Did I answer the questions on the Form(s) 4852 succinctly, factually and without arguments?

5. Did I carefully NOT attach the 1099-R(s) being rebutted to my filing, but carefully attach the Form(s) 4852 as substitutes for those at least partially-erroneous 1099-R(s)?

FOR OTHER 1099-REBUTTING FILERS:

1. Did I create a rebuttal instrument for each erroneous 1099 received by, for example, photocopying the received original, striking or whiting out all erroneous assertions and replacing them with correct information, with a plain and succinct signed declaration on the same page that the instrument is a rebuttal of an erroneous allegation known to have been made by the entity listed as "Payer", and that all information thereon is, to the best of your knowledge and belief and under penalties of perjury, true, correct and complete?

FOR K-1-REBUTTING FILERS:

1. Did I create a rebuttal instrument for each erroneous K-1 received by, for example, photocopying the received original, striking or whiting out all erroneous assertions and replacing them with correct information, with a plain and succinct signed declaration on the same page that the instrument is a rebuttal of an erroneous allegation known to have been made by the entity listed as "Payer", and that all information thereon is, to the best of your knowledge and belief and under penalties of perjury, true, correct and complete?

FOR FILERS WHO OWN THE BUSINESSES THAT PAY THEM

1. Did I ensure that any erroneous prior business filings for the relevant year concerning things being addressed on, or relevant to, my personal return (such as W-2s, or business returns treating my business as a federal corporation, for instance) have been corrected?

2. Did I ensure that any erroneous filings about others made by my business have been corrected (such as W-2s or 1099s, for instance)?

FOR FORMER "TAX HONESTY COMMUNITY" FILERS:

1. Did I refrain from quirky zip-code "bracketing" [] or other irrelevant and sometimes balk- or harassment-inviting indications that I'm really just a "tax honesty" wanderer trying things out without firm knowledge, confidence and intent?

2. Did I include the SSN assigned to my "account" with the tax agency so as to make it easy to process my return?

3. Did I sign the jurat without compromising it in any way (that is, without any strike-outs or additions that compromise its sincerity); and without any notations or other balk- or harassment-inviting indications that I'm really just a "tax honesty" wanderer trying things out without firm knowledge and confidence (such as expressions of a fear that one's rights are somehow compromised by signing a tax return, and need to be explicitly reserved against that danger)?

4. Did I carefully ensure that every conclusion reflected in the filing is squarely grounded in what is presented in CtC, and not tainted in any way with notions not found in CtC (such as any of those discussed here, for example)?

FOR ALL FILERS:

1. Did I attach instruments rebutting any and all erroneous "information return" allegations known to have been made concerning payments made to me, and supporting the entries on my 1040?

2. Did I only attach things to my return that I believe to be true, complete and correct, and nothing which contradicts anything else attached?

3. Did I refrain from making any kind of legal (or other) argument anywhere within or as part of the filing, and confine myself to filling in relevant blanks with fact entries?

4. Did I make and save paper copies or high-quality scans of every page of the signed and dated filing?

5. Did I have my filing comprehensively witnessed?

6. Did I generously do my best to ensure that my family members, friends and acquaintances know why and how to file CtC-educated returns themselves?

I HOPE THIS CHECKLIST helps any who need it, and I hope that all will do their best to share it around. Unfortunately, not everyone finds his or her way to this page, and thus, without courteous sharing by those who do, much important or helpful material can be missed even by those who need it most.

AND BY THE WAY... When you have won them, SHARE YOUR VICTORIES!! That's a good chunk of YOUR part of the bargain in exchange for my efforts teaching you how to be free (and how to keep or regain control of a huge portion of your wealth). Find formatting guidance here.