Cracking the Lies

One of the pernicious fictions persistently promoted by the "ignorance tax" crowd is that CtC-educated victories are the result of some kind of glitch in the tax-agency's systems-- that they have all "slipped through the cracks", and are just a series of remarkably widespread and sustained mistakes that'll get straightened-out in due course.

If so, it would be a pretty big and long-lasting "crack"...

This lie is cleverly used in an effort to defuse the impact of the six-years-and-counting river of never-before-seen-in-history accomplishments of the CtC community, and to plant anxieties in the minds of those unfortunate few in the community who are subjected to special discouragement efforts either before or after securing their victories.

However, the fact is that nearly every one of the hundreds and hundreds of posted federal victories, at least, underwent specific, special scrutiny by the IRS before the checks and notices were issued to the warrior involved (the 33 states obeying the law and issuing refunds to educated Americans may have similar vetting to that described below, but I can't say that authoritatively).  This is manifest in the documentation itself in many cases, of course, such as in the scores of special victories posted at www.losthorizons.com/tax/Highlights.htm and in the 'Every Which Way But Loose' series.  But even those involving no more than the initial filing and the issuance of the check or credit notice have gone through the same pre-issuance vetting by the 'service', which actually testified to this effect in affidavits filed by the government in its PR "lawsuit" against my wife and me. Here is how I summarized this testimony in a brief I filed in that case (with a few [bracketed] updates here and there):

[IRS specialist] Henline’s “declaration” merits a few further observations beyond the points already made, however, particularly insofar as her “declaration” is to be imagined as supporting Plaintiff’s depraved prayer to this honorable Court to assist it in suppressing Defendant Peter Hendrickson’s speech.

After her tedious ruminations about how the world would be if only IRS-approved testimony were allowed to have standing in legal contests, Henline proceeds to describe an IRS program called the “Frivolous Return Program”, which she says operates out of the “Ogden Compliance Services Campus”. She states (in paragraph 21 of her “declaration”) that “Near the end of 2004” she and her colleagues began to observe “a particular pattern or trend” of filings with characteristics which Henline means to be taken as reflecting the knowledge communicated in ‘Cracking the Code- The Fascinating Truth About Taxation In America’. She obviously hopes that this honorable Court will presume that the filings described qualify as “frivolous”, simply by associating them with her discussion of this program.

However, throughout Henline’s “declaration” in its entirety, she never once actually declares the returns she describes to be improper or frivolous. Indeed, she doesn’t even declare OUR returns to be improper or “frivolous”. The closest she comes is to suggest that it was “erroneous” for us to include in our claim for refund the amounts withheld in connection with the possibility of Social Security and Medicare “wages” having been received. She doesn’t trouble herself to explain how, in light of the fact that we DID NOT receive such “wages”, the government has any proper right to keep that money...

Henline is really just trying to play a semantic game involving the fact that on certain tax-related forms, some amounts withheld are designated as “Federal income tax withheld”, some as “Social security tax withheld” and some as “Medicare tax withheld”, while the line on a 1040 for reporting the total amount withheld uses the expression “Federal income tax withheld”. The fact is, the distinction of “federal income tax withheld”, “Social security tax withheld” and “Medicare tax withheld” on certain forms is purely nominal, without any legal meaning-- the law explicitly declares “Social security” and “Medicare” taxes to be “income” taxes like any others.

Henline plays other semantic games in this portion of her “declaration” as well. She deploys the term “taxpayer” throughout her descriptions of the filings noted by her “Frivolous Return Program”, in the apparent hope that the inference will be drawn that some filers are making claims unsuited to their status (although again, without actually saying so explicitly). However, when Henline specifically refers to those who have received refunds, she carefully uses the word “individuals”, instead. Yet another of the endless examples of the bad faith underlying the “complaints” in this action.

HENLINE CONTRADICTS HERSELF IN HER DECLARATION-- PERHAPS WHILE SEEKING TO CONCEAL THREE YEARS OF SUSTAINED PROOF THAT RETURNS AND CLAIMS LIKE THOSE OF THE HENDRICKSONS ARE NOT IMPROPER, “FRIVOLOUS”, FALSE OR FRAUDULENT

Further on in the “Frivolous Return Program” portion of her “declaration”, in paragraph 24, Henline contradicts her earlier statement regarding timing. Now she says that the “pattern or trend” of filings to which she refers first caught the attention of her and her colleagues shortly after the publication of ‘Cracking the Code-...’ in July, 2003, rather than “near the end of 2004”. There is about a year-and-a-half of spread between these two points on the calendar, suggesting that Henline is making this up as she goes along and lost track of her earlier fabrication by the time she got around to the later one. Another possibility is that she made the first assertion in deliberate service to her purposes in this carefully-crafted “declaration”, and then had a failure of cunning and told the truth inadvertently with the second date.

We favor the latter of these two possibilities, as we suspect that Henline would prefer it to be imagined that it was only in late 2004 that the IRS began to take an interest in what Peter Hendrickson reveals about the law, and would prefer that the preceding 18 months to be forgotten. But it was not late 2004 before the IRS focused on this subject.

The truth is, the very week ‘Cracking the Code-...’ became available (which was actually late August of 2003), the IRS downloaded the content of Peter Hendrickson’s website, losthorizons.com, as part of its immediate preparations for efforts to suppress his book and other speech-- in part by means of injunctions of the same sort being sought in the instant action. The IRS and Department of Justice formally launched those efforts in February of 2004, commencing three different legal actions over the course of the following 7 months-- two of them in this very Court-- and including in its evidence packages the downloaded website content mentioned above. Each of these three actions was eventually dismissed on the government’s own motions, raising a bar to its further pursuit of such efforts under the doctrine of res judicata.

The more significant aspect of this timing reality is the fact that the IRS has been intensely conscious of Peter Hendrickson and his speech for fully three years now [make that seven years now]. The agency has also been intensely conscious of the many, many filings made by Americans across this great country who have read ‘Cracking the Code-...’ and acted based upon what they have learned-- and really wishes it could stop them. But, its gross obfuscations in the instant action notwithstanding, even the IRS recognizes the truth about these filings, and what the law requires. Thus, the agency has been routinely delivering complete refunds of every penny withheld from the (often) considerable earnings of these upstanding Americans-- including nominal “Social Security” and “Medicare” taxes-- during that entire period, without interruption.

Well over a million dollars worth of such refunds [now many millions more], respectfully issued by the federal and 22 [now 38] state and local governments so far, are displayed at losthorizons.com, and many more have been reported as received but not made available for display. These refunds, the displayed host of which range from a largest single check of $75,150.00 to a smallest of $1.00, continue to this very day. The most recently dated federal refund check posted issued on August 11th, 2006-- every penny withheld from this upstanding American during 2003, plus interest. It shares page space with another issued July 17th, 2006, by the very Ogden “campus” at which Shauna Henline’s “Frivolous Return Program” operates. Obviously, these filings are not in any way false, fraudulent, or “frivolous”, or anything but lawful, proper, and correct in every way. [The most recently posted now is dated March 26, 2010]

Many of these refunds have involved considerable personal contact between the Americans claiming them and IRS workers. Many filing readers, having no withheld property to reclaim, have instead secured transcripts of $0 balances as posted in the IRS database. Others have had “Notices of Deficiencies” and levies withdrawn, or received reimbursement of money previously taken from them by garnishment. Obviously, these filings are not in any way false, fraudulent, or “frivolous”, or anything but lawful, proper, and correct in every way.

Indeed, just last week the Washington Post reported that throughout 2005, a year during which nearly $1,000,000.00 worth of (merely the posted) refunds were issued, the IRS had a sophisticated “fraud detection” computer program in use, which specifically scrutinized every return on which a refund was claimed. Another administrative program in use since 1977 [the "Questionable Refund Program"] was also deployed during the same period, under which more than 120,000 refund claims WERE frozen last year. But not those claimed by these ‘Cracking the Code-...’ readers. Obviously, this near million dollars worth of refunds claimed by readers of ‘Cracking the Code-...’ (and the many more received during 2005 but not available for display, and the others of the same character claimed before and since) DID NOT AND DO NOT QUALIFY AS FALSE OR FRAUDULENT. Needless to say, the same is true of the returns by which these claims were made.

To see the relevant excerpt of IRS employee Shauna Henline, click here.

As is made clear through Henline's testimony (and the special victories on the Highlights and EWWBL pages in which the refunds were pulled from the very jaws of recalcitrant tax agencies), refunds issued by the feds happen only after considerable vetting.  They are not "slips through the cracks"-- they have been poked at, prodded, studied, sometimes strenuously-resisted, and then sent out.

The IRS is not some uniquely naive entity that just sends out checks because someone asks for them!  What a ridiculous thing to suggest!  By the way, in testimony in trial recently, Henline herself admitted that her office alone has seen at least ten thousand CtC-educated filings over the last few years, estimating, as she put it, "conservatively".

Indeed, the exact opposite is true, and everyone knows it.  Unfortunately, some folks let themselves get flustered by hearing about scary "threat letters and notices" (without looking closely enough to notice that these "notices" never actually use the word "assessed"), or absurd after-the-refund "collection efforts" (as in "We changed your account" notices, and the like) in which the ridiculous implication it is hoped that everyone will take away is, "We're just such nice guys that we send out checks on request, and rely on being able to go back later and fix any mistakes..."  These folks stop thinking clearly, and/or become prey to tax-agency shills within the "tax honesty" and "tax professional [read: beneficiary]" communities who point to these pretenses in an effort to frighten and discourage.

Remember, people, "fear is the mind-killer".  Keep your mind alive, and your thinking cap on.