A DOJ Desperate To Suppress The Truth Files Seven Profoundly Corrupt Lawsuits
Ironically, The Department Is Forced To Illustrate A Key Lesson Of 'Cracking the Code- The Fascinating Truth About Taxation In America' In The Process...
(Click here for the latest update)
The US Department of Justice (sic) has announced the filing of civil lawsuits against Peter and Doreen Hendrickson, and six other parties who have lawfully claimed, and received, the return (refund) of their own property which had been put into the keeping of the federal government against potential tax liabilities which did not ultimately materialize. The suits characterize these refunds as "erroneous"-- that is, as having been refunds of taxes paid (rather than what they really were-- the relinquishment of property put on deposit against a possible tax liability which didn't subsequently arise), issued by mistake, and indicate that the government wants the property restored to its possession.
Not coincidentally, all of these parties are students of the information presented in 'Cracking the Code- The Fascinating Truth About Taxation In America', a book the federal government has repeatedly attempted to suppress since its initial publication in August of 2003. The book, which unravels the complexities of the income tax (in particular), and reveals the means by which that tax has been improperly administered and applied over the decades, is now in its sixth printing-- thousands of copies are being read and shared across America (and on four other continents, as well). Thus, it is too late to close that barn door now.
What The Government Doesn’t Want You To Know
For the benefit of those who have not yet read ‘Cracking the Code-...’ (CtC), here is a quick sketch of what the government is so desperate to suppress, even while it continues, every week, to properly issue complete refunds to readers acting on what they have learned in the book:
The income tax is a tax on gains from voluntary involvement in federal activities-- either as a worker/office holder, or as an investor or beneficiary-- and nothing else. That limitation is what keeps the tax in the good graces of the Constitutional prohibition of capitations and other direct taxes, which it would otherwise qualify as if extended to any other subjects.
Since its debut in 1862, the creation of a legal instrument swearing to the amount, and the taxable status, of every payment of such specialized gains has been a part of the tax’s bureaucratic structure. The most common such instruments (called ‘information returns’ in the law) are known as W-2s, 1099s and K-1s-- each of which contains, deep in its legal fine print, a clear and explicit declaration that the payment which it reports IS a gain from involvement in federal activities, and is therefore taxable.
Over the decades, through a combination of factors, Americans have been trained to execute one of these information returns whenever they are making almost ANY kind of payment, leaving the correction of errors to the recipient of the payment. Quite properly, a means by which such corrections can be accomplished is thoroughly provided for within the law.
Unfortunately, a general understanding of the limitations of the income tax, and the mechanisms by which it is implemented, has faded. This is not really too surprising. Although its basic principles are simple and straightforward, the body of the tax law itself is a mind-numbing several millions of words long. More, the structure of the law contains a number of elements which are capable of being misunderstood as extending the tax beyond its actual limits, when examined superficially. ‘Cracking the Code- The Fascinating Truth About Taxation In America’ thoroughly, comprehensively and unmistakably corrects such misunderstandings, and reveals the liberating knowledge of what the law actually says, and how it really works.
However, daunting complexity and widespread ignorance of the law have not been the sole tools for maintaining the tax scheme-- fear of corrupt official behavior, and the carefully-nurtured perception that a high price will be paid by anyone who asserts his or her rights in this area have also been heavily relied upon. Thus, these DOJ/IRS lawsuits: the former having been undone, the latter are now being called upon.
A Few Observations About These ‘Lawsuits’
The filed lawsuits suffer from several key technical flaws, discussion of which will be reserved for another occasion. They are, in fact, remarkably shoddy pieces of legal work.
Among other errors, these suits misrepresent aspects of the law (although, in fairness to the reputation of the lawyers who assembled them, this is probably deliberate, for purposes of intimidating the defendants and misleading the press). For instance, the government makes a show of challenging explanatory language regarding "request" and "fear of IRS retaliation" on forms filed to correct erroneous information returns, when only the material facts on such forms (i.e., the numbers) are actually relevant to the statutes under which the suits are purportedly authorized. More importantly, the suits uniformly mis-represent the information presented in CtC (and by implication, the testimony of the defendants), in keeping with a well-established pattern which has appeared in previous IRS efforts to thwart or discourage Americans acting on the knowledge gained from reading the book.
For example, uniform language in each suit refers to "[Hendrickson's] arguments that wages are not income". I think there is no one in the world who makes more clear than I do in dozens of writings on the subject in general, and in CtC in particular, that "wages" ARE, in fact, "income'... Similarly, there is language in the suits to the effect that I have said that only government employees are subject to the tax: complete nonsense both as to the substance of the assertion, and that I have ever made it. Such assertions are ascribed to me and to CtC by the government because it can pooh-pooh them as not true. The government has no response to what I DO say, and so it does not address the actual information I provide.
Another uniform misrepresentation in these suits is a carefully-presented suggestion that the government's return of the property belonging to the targets of these corrupt lawsuits occurred in a fog in which only the target's filed claim existed, thus (as the government would have it) misleading the Treasury Department to cut a check. This is absurd.
The fact is, these suits are FOUNDED on nothing but the testimony of those who created information returns (W-2s) about those targets, which are supposed to be sent to the government at the same time that they are sent to those about whom they are created. It's possible that these W-2 creators were simply lax about following the law (they appear to be in other respects-- see The Criminal Rites Of Spring), but we know they at least sent them out to the filers (since it is these W-2s that the filers are accused of disagreeing with). We also know that the whole point of sending them to the filers is to give notice to those men and women that they have been testified about-- by means of the same form having been sent to the government-- so that they can look after their interests by way of response. Further, we have heard nothing about any of these companies being charged with a failure to submit the forms at the time and in the manner provided by law. (For that matter, we have heard nothing about THEM being accused of making "false and fraudulent" expressions for disagreeing with the FILER'S testimony...)
In fact, it is a virtual certainty that the amounts withheld, and re-claimed, by the good and brave Americans who are now targeted for abuse simply for testifying in a fashion contrary to the government's preferences, were verified by comparison with the very information returns the government is relying upon in trying to make its case in these suits (this is, in fact a certainty in my own case, as is verified by sworn testimony introduced by the government in the case). Thus, the proposition that the poor, eager-to-please Treasury Department just sent out these checks due to taking the filer's word for things, while having no other information to work with, is not just absurd-- it is a bald-faced lie.
Again, these suits all rely entirely on the assertions of the creators of those information returns to propose that the filer's claims are "false and fraudulent", and to suggest that the government has a claim to the filer's property-- despite the fact that the assertions of the information return creators are nothing more than that-- mere assertions-- having no more legal weight than the contrary assertions of the targets of these lawsuits, and actually less, once a relevant 1040 has been executed. This is, in fact, the heart of the matter-- the government is incapable of simply asserting that each of these targeted Americans made money, and that a tax is therefore due, because the one doesn't actually follow from the other, as every reader of CtC understands.
This Is Not Just About Taxation-- It's About The Right To Speak, And To Due Process, As Well
What these suits don't have in common is the extraordinary inclusion in the suit directed at my wife and me of a request of the court to order us to testify, on our sworn tax returns, as directed by the government! I guess the recent government authority sought to the effect that one MUST answer an official question is not good enough-- now the government wants to instruct Americans as to WHAT THEY MUST SAY in their answers, as well!
The fact is, without a change in the testimony on our returns, the government actually can assert no claim to our property. The government has no claim on that property unless and until our receipt of a requisite amount of "income" is legally established (causing a possible resulting tax liability). Since that requisite amount was NOT, in fact, received, the government's only means of establishing a claim is to coerce us to execute a sworn statement to the effect that it was, and it is asking the court to do that for them, and thus implicitly admitting to this simple legal reality.
(This admission is interestingly emphasized by the fact that we actually only received $3172.30 in cash in regard to 2002 and 2003-- the remainder of the property withheld and then returned in connection with those years was officially credited against what the government alleged to have been outstanding liabilities for earlier years (years for which the IRS has illegally refused to process relevant returns properly and timely filed). If the government actually had the authority to disregard an American's filed return, as the DOJ's suit (and decades of ridiculous propaganda from the IRS) has suggested, the government's accountants would simply reassign the credits and debits, sue for the $3172.30 plus interest, and perhaps come after us for what would be alleged to be once again outstanding from the earlier years.)
Of course, even though it is only spelled out in the language of the suit directed at my wife and me, all of these lawsuits actually have this same pernicious speech rights and due process violation at their hearts. All of them seek to coerce cooperative testimony from their targets (or restrain uncooperative testimony, if you prefer) by punishing testimony which is not to the government's liking. In the end, none of the government's claims to the property involved can stand unless the targets can be frightened or coerced into changing their existing testimony, as discussed above.
Indeed, that a prayer to the court to coerce a changed 1040 is found only in the suit directed at my wife and me may explain why we are the only parties named in this elaborate media event to have actually been sued, so far (as of Tuesday morning, April 18th). Although threatening paperwork naming six other parties has been prominently posted on the DOJ website linked at the beginning of these comments, none of these other good and brave Americans has actually been served papers.
Can you say, "Last minute media-event sham, intended to frighten fence-sitters into irrevocably committing themselves to damaging testimony by filing per the government's preferred misunderstanding of the law"? And how about, "Grossly cynical and corrupt camouflage for another shot at suppressing CtC"? (The former may not be borne out by future events, but I feel pretty confident about the latter, in any case.)
*****
As noted above, this effort is all about the intimidation and discouragement of the increasingly large number of Americans becoming educated as to the truth about the "income" tax. In particular, it is intended to suggest to those folks that, somehow, they actually do not have the right to introduce their own testimony into the record, and controvert the testimony introduced by information return preparers (which, if left uncontroverted, just happens to entitle the tax agencies to keep the filer's money... Go figure!). Thus, a few random thoughts on that subject:
"...a statute which imposes a tax upon an assumption of fact which the [presumed] taxpayer is forbidden to controvert is so arbitrary and unreasonable that it cannot stand under the Fourteenth Amendment." United States Supreme Court, Heiner v. Donnan 285 U.S. 312 (1932)
"...irrebuttable presumptions have long been disfavored under the Due Process Clauses of the Fifth and Fourteenth Amendments." United States Supreme Court, Vlandis v. Kline, 412 U.S. 441 (1973)
"A fundamental requirement of due process is "the opportunity to be heard." Grannis v. Ordean, 234 U.S. 385, 394 . It is an opportunity which must be granted at a meaningful time and in a meaningful manner." United States Supreme Court, Armstrong v. Manzo, 380 U.S. 545 (1965)
The exchange of evidence by way of returns (information returns and 1040s, etc..) IS the "meaningful time and manner" involved in the "income" tax, so much so that a concrete penalty-- a $500 fine-- can be imposed on someone about whom an information return is created by someone else, should that person fail to file their own evidence in response. Further, the government proceeds to impose all manner of onerous, burdensome, and often expensive legal infirmities and harassments upon those who do not introduce evidence by means of a return-- the object of which is the severance of the target's rights to his or her own property. Consequently, it is worth remembering that,
"The right to be heard before being condemned to suffer grievous loss of any kind, even though it may not involve the stigma and hardships of a criminal conviction, is a principle basic to our society." United States Supreme Court, Joint Anti-Fascist Comm. v. McGrath, 341 U.S. 123, 168 (1951);
and that,
"If [a provision of the Constitution] will thwart the effectiveness of a system of law enforcement, then there is something very wrong with that system."
United States Supreme Court, Escobedo v. Illinois 378 U.S. 478 (1964)
Another goal of this campaign is, of course, generating a reflex reaction in the minds of those who still accept the presentations of the IRS at face value (due to either innocent or stubborn ignorance, or a corrupt congruence of interest). It is, in other words, a cynical ploy calculated to erect a mental "barrier to entry" against those who do not yet know the truth, which is being furnished by, and to, those with a financial interest in keeping such people in ignorance. I hope those reading these words who have not yet made a study of the "income tax" subject keep this clearly and honorably in mind while moving forward.
***
This DOJ/IRS effort is a sorry piece of work in every regard, and one that should raise the hackles of every American. I will continue to update you all on this affair as is appropriate.
Update:
I'm sorry to say that, as of May 9th, several of the good Americans selected for abuse in service to this IRS "public relations" campaign-- Jim Spitzer, Sharon Artman, Mike Dowling, Larry and Debra Golson and Joy Ferguson-- were finally served with the threatened "lawsuits". (By "public relations campaign" I mean: Campaign to refresh the fear by which Americans have been discouraged from reading the law for themselves for a few generations now...) As I observed when this desperate band-aid campaign began, I don't think the beneficiaries of widespread ignorance of the law who are behind this could have made poorer choices of victims of their assaults.
Every one of the folks targeted by these "lawsuits" is a good, brave, well-educated American hero, who has already stood up for the rule of law (and, happily, but not coincidentally, has properly secured his or her legal standing-- vis-à-vis the instant contest-- at the same time). These folks also know what's at stake in this affair-- and by that don't mean, "What's at stake for me, personally?" They know that what is at stake here is whether they, their children, and their fellow Americans live in a country where the law is actually the will of the people-- in practical and meaningful effect, rather just pro forma. The plaintiff in these "lawsuits" is trying to ensure that Americans remain-- de facto-- mere "human resources": Subjects in a country ruled by self-serving "interpreters" of the law, to whom the words, "No", "Prohibited", and "Reserved" in the Constitution are not commands to be faithfully obeyed, but rather "challenges", to be slyly and creatively evaded. ("Human resources" is really far too euphemistic a descriptor-- "livestock" is more like it; or, as the Wachowski brothers put it: "coppertops".)
These folks will stand up again, and will prevail. At its core, each and every one of these "suits" has the same fatal flaw-- a complete lack of any evidence establishing that the United States has a claim to enforce against these Americans. In fact, the evidence in the record establishes, in the manner proved for by law, that none of them received sufficient "income" for a relevant tax debt (and consequent government claim) to arise. While I do not know the individual circumstances about which each of these folks testified in the filings related to each "lawsuit", of course, I don't doubt that each and every one of them were honest and accurate in every material matter.
I hope everyone will join me in wishing these good folks swift victories in their battles.
Update Update:
Sadly, several of the folks assaulted in this corrupt DOJ/IRS campaign-to-dissuade have allowed themselves to be intimidated or harassed into repudiating their own original testimony in exchange for the dropping of these "lawsuits". It should escape the attention of no one that it was only by means of that repudiation that these actions ended-- that is, the plaintiff DOJ/IRS did not in any respect prove that the original filings of these victims were contrary to the law. Instead, these victims were persuaded to "voluntarily" re-characterize their receipts for the years involved as having been from taxable activities (after having originally declared them not to have been)-- thus creating a governmental claim to a tax due and owing.
Finally,
I'd like to point out, especially to the attention of those who harbor a deep-seated cynicism about the integrity of American courts, that no one should be particularly interested in the outcome of this contest from a legal perspective. I am not quite so cynical, and thus fully expect and intend to ultimately win this contest-- no other result is remotely compatible with any principle of law, and the courts would have to reverse hundreds of years of solidly-established doctrine to side with the government in this case. However, even if that should happen (and I'll grant that there IS a lot of gravy-train at stake here), we must remember that, "A free people claim their rights as derived from the laws of nature, and not as the gift of their chief magistrate", as Thomas Jefferson said so well. No real American is going to speak, like a dog, at the direction of some "public servant"; nor remain silent, like a slave or a child, while others speak about him, regardless of the consequences.
*****
The Hendricksons' Answer Has Been Filed!
Choose from a .pdf version, .doc version, or .html version, and Enjoy!
(If any of these will not open from the site, right-click and choose 'save target as' to save a copy to your local machine)
The DOJ filed a 'Brief In Opposition' to our answer, on May 23rd
Here is our reply, filed June 5th:
(The exhibit materials referred to in our reply consist of our tax return instruments for 2002 and 2003, and these)
Apparently having decided that even the sound of putting a foot in one's own mouth is better than a protracted silence when one is pretending to be in command of the situation (and so much so as to be worth risking a display of disrespect to the court, which has not yet ruled on our already-pending motions to dismiss), the DOJ has filed an untimely "Motion for Summary Judgment". I'm sure part of its cost/benefit calculation was based upon the presumption that most of those for whom the agency practices its pretenses will never actually read these filings, but I hope that you will prove this wrong. If you haven't already, read our initial response to the government's "complaint", and our reply to its "Brief in Opposition" to that response-- and then read this "Motion for Summary Judgment". It is very instructive, because in this sort of filing, the filer must present what are purported to be all the facts needed to support its position. That is, the DOJ must present evidence of whatever facts it imagines the law requires to be established in order for it to prevail under its preferred theory of the contest (which deliberately disregards the core issue of its inability to be bringing suit in the first place).
In light of that requirement (and considered solely in the context of the DOJ "theory" of the contest), the significance of the fact that the sole effort made by the DOJ toward this end is another (futile) attempt to present the "Declaration of Kim Halbrook" as "establishing" that my earnings constituted "wages" (and thus "income") should escape no one. (The utter insufficiency of Halbrook's "declaration" to do so is pointed out in detail in our reply to the DOJ "Brief In Opposition". The additional "declarations" of two IRS employees presented as exhibits with the DOJ "motion" are entirely dependent upon and subordinate to "Halbrook's", a fact admitted within each, and also pointed out, in regard to Henline's, in our aforementioned reply.) Nothing else is deemed to be relevant.
I realize that some will briefly object to the assertion that the government's failure to present something else means that there is nothing else that could be presented. Certainly the one does not automatically follow from the other in a purely mechanistic fashion. However, no one with even a passing familiarity with this affair will doubt that anything and everything that could be deployed in support of the government's case will be deployed. While the truth about the law is not dependent in the least upon the outcome of this contest, there is no question that a victory here for the good guys means the end of the gravy-train scheme.
Further, the alternatives that might be imagined by many of those who imagine such things-- such as citizenship status, the assignment of a Social Security number, the execution of a W-4, the use of banks, or of Federal Reserve Notes, or zip-codes, or whatever is the latest notion seized upon as an excuse for edging away from the real contest-- are all of a documentary nature. Consequently, if any such could serve to establish my receipts as being taxable, they would certainly be preferred to the hollow "evidence" of Kim Halbrook's (at best) ambiguous, and completely unschooled, opinions about the legal character of those receipts.
Those who have simply never thrown off the "everything-that-comes-in-is-income" brain-washing are encouraged to take note that the government is in no way, shape or form content to simply assert that I or my wife made money and therefore owe a tax. Instead, it takes great and unfailing care to assert nothing but that I was paid "wages" and therefore owe a tax (or, more specifically, to assert that Kim Halbrook says that I was paid "wages", and that I therefore owe a tax); and that Una Dworkin, a woman with whom my wife had business dealings during the years in question, said on 1099s that Doreen was paid "taxable compensation" and therefore a tax is due. If the "get paid for working, owe a tax" notion were true, the simple entering into evidence of a few cashed checks would be the end of this contest. It's not true, and those of you letting yourselves be fooled by the idea need to face that fact.
(You also need to face the ridiculousness of the underlying proposition that the framers of the Constitution, who had just fought a bloody revolution over, in large part, a total tax burden never exceeding 3%, authorized an unlimited tax on up to 100% of anyone's earnings at the whim of a government described by Washington as "A dangerous servant and a fearful master"-- or, you really haven't been paying attention at all and imagine that the 16th Amendment had anything to do with the establishment of the "income tax", the similarly absurd notion that this ruinous and despotic power was given to Washington in 1913 by the ascendant populist movement, which had come to dominate the political scene due to a universal perception that the national government was utterly in the thrall of the "Robber-Baron" class.)
Those whose imaginations run to the conspiracy/universal-corruption option, and have concluded that the "income" tax is applied as though Congress has the power to tax all revenue, in arrant defiance of the Constitution and the law as written, need to reflect on the point made above as well. The massive-conspiracy thing is just not true, and clinging to it is nothing more than an excuse for inaction by way of the "You can't fight City Hall" whine. Intellectual accomplishment can be demanded of no one, but intellectual honesty can be insisted upon in everyone, and is.
Our Reply To The Motion For Summary Judgment
February 9, 2007: After months and months of silence, the magistrate supervising the IRS public relations (read: public intimidation) "lawsuit" against my wife and me has suddenly filed two non-dispositive, but 100% adverse, "Report and Recommendations" to the judge in the case regarding the motions to dismiss and for other relief with which Doreen and I initially responded to this "suit", and the untimely "motion for summary judgment" belched up by the plaintiff last July. It is an interesting coincidence that these filings have occurred at the very same time that most Americans are seeing W-2s and 1099s show up in their mailboxes, and have before them the once-a-year opportunity to secure themselves against any improper application of the "income" tax which is afforded to each person about whom such "information returns" are created.
Our response to the first of these "Report and Recommendations" can be seen here.
Our response to the second can be seen here.
March 2, 2007: I'm sorry to say that, although I had harbored some hope that the district court judge would display more integrity, my initial expectations for the progress of this "lawsuit" are being borne out. Judge Nancy Edmunds, not even 24 (business) hours after our response to the second "Report and Recommendation" had been filed (while declaring nonetheless that she has "reviewed the record and the pleadings", including our not-yet-dry response), proceeded to issue her rulings-- denying our motions and granting the plaintiff's. (I guess this must be the only case on her docket; that Judge Edmonds is an "Evelyn Wood" graduate; and that taking several historical steps into bizarro legal-land-- such as declaring that we can be made to testify on a sworn statement as dictated by others, or suffer the legal infirmity of non-filing; or that our property can be awarded to a plaintiff without a trial-- required only the briefest possible period of agonizing deliberation...)
Obviously, I am tempted toward sarcasm here. But really, cynicism is the more appropriate response: As the headline says, "'Tis the Season...", and I guess Judge Edmonds feels reversal from above some time in the future is a price worth paying to get free today of what has to have been intense pressure from somewhere. The same can be said of those playing "plaintiff" in this little charade. This has always been about buying time-- that is, discouraging yet another batch of corrective and protective filings against the consequences of which the "plaintiff" has no real legal remedy, when all is said and done. Onward and upward-- this is only the beginning of this contest.
Post-District Court Decision Motions
Just for the sake of thoroughness (rather than in the expectation of anything coming out of it at this level) I have filed two motions in response to the not-startling, but definitely disappointing action of the district court judge in the first stage of this IRS PR-campaign "lawsuit" against my wife and me.
One is a "Motion For Relief Of Judgment", which makes use of a provision in the Federal Rules Of Civil Procedure for seeking post-judgment remedy of a defective ruling, and is not my own work, but that of an attorney who has been following this case. This motion doesn't deal with the central issues of the case, but makes the collateral point that in this hokey "lawsuit", even without considering the fact that the government is attempting to get a court to do what could not be legally done by the Treasury Department (that is, determine a tax liability in defiance of our returns), jurisdiction for making any and all determinations of liability other than by self-assessment has been exclusively granted to the department, and withheld from the district courts. Thus, the court lacks jurisdiction for yet another reason, and should dismiss the case.
The other is a "Motion For Reconsideration". This motion is unlikely to be given any more "consideration" than our other filings have been by this court (which, by all indications other than rote declarations to the contrary, have not even been read...). However, drafting it was good exercise for the next stage in this affair.
I also believe that the contents of this motion will be helpful to others in maintaining focus in the face of the bad guy's efforts to sow confusion, and to operate as a moving target (which is what they have to do now that they are reduced to nothing more than scrambling to shore up an exposed and rapidly crumbling lie).
Thus, I've posted the contents of that motion below. It's a bit of a read, but I hope everyone will make it through, because I think it will be found worth the effort.
The fact is, as obnoxious as it has been to deal with (and apparently will continue to be, for a while yet), this "lawsuit" serves as a wonderful demonstration of the truth about the "income" tax which is revealed in CtC. This is because even in the narrow and focused venue of this case, where every government presentation is necessarily as deliberate, considered and definitive as it can be, the government simply cannot and will not dispute that truth.
For instance, if ever there was a time to just say plain out that "Hendrickson says his earnings are not "wages", but that is wrong because all earnings are "wages"", this would be the time. And yet, throughout several hundred pages of elaborate filings (to characterize their deliberately confusing complexity in the most charitable way possible)-- and in a venue where it is obliged to make its best case, and has no credible reason for anything but simple frankness-- the government which aches to have you and everyone else BELIEVE that this is so, and ACT as though this is so, just CAN'T and WON'T declare that this is so.
If ever there was a time to just say plain out that "Hendrickson says not everyone working for someone else is an "employee" within the meaning of that term in chapter 24 of the IRC, but that is wrong-- everyone working for someone else is an "employee" within the meaning of that term in chapter 24 of the IRC", this would be the time. And yet, throughout several hundred pages of elaborate filings-- and in a venue where it is obliged to make its best case, and has no credible reason for anything but simple frankness-- the government which aches to have you and everyone else BELIEVE that this is so, and ACT as though this is so, just CAN'T and WON'T make that plain and frank declaration.
If ever there was a time to say, "Hendrickson's wrong about the significance, effect, and utility of a tax return (and we have exercised our authority to change or override returns, and have determined that the Hendricksons have existing liabilities)", this would be the time. And yet, throughout several hundred pages of elaborate filings-- and in a venue where it is obliged to make its best case, and has no credible reason for anything but simple frankness-- the government which aches to have you and everyone else BELIEVE that this is so, and ACT as though this is so, just CAN'T and WON'T make that plain and frank declaration.
Instead, the government's ENTIRE "argument" is: "So-and-so (whoever typed up a couple of W-2s) says Hendrickson was an "employee", and that his earnings were "wages"". That's it.
Instead, the government is begging the court to order us to change our returns, and to command us not to file inconvenient returns in the future. That's it.
In short, as has been consistently true in every effort the government has made to discourage people from learning the liberating truth since CtC first appeared, everything the government DOES say, and everything it carefully does not, simply acknowledges that truth, and emphasizes the fact that the only answer the government and other beneficiaries of the "income" tax scheme have to CtC is bluster, belligerence and BS. As we enter the final month of this year's "tax season", this "lawsuit" helps make clearer than ever the simple choice everyone faces: whether to affirm and stand with the truth, or to nourish the illusions by bowing before them for yet another year.
Motion For Relief From Judgment
This last motion makes use of a provision in the Federal Rules Of Civil Procedure for seeking post-judgment remedy of a defective ruling, and is mostly not my own work, but that of an attorney who has been following this case and who generously put this together and sent it to me for a bit of tweaking and eventual submission. This motion doesn't deal with the central issues of the case, but makes the collateral point that in this hokey "lawsuit", even without considering the fact that the government is attempting to get a court to do what could not be legally done by the Treasury Department (that is, determine a tax liability in defiance of our returns), jurisdiction for making any and all determinations of liability other than by self-assessment has been exclusively granted to the department, and withheld from the district courts. Thus, the court lacks jurisdiction for yet another reason, and should dismiss the case.
The District Court Has Done It Again...
What does it mean when the government and a judge resort to an unprecedented, unenforceable, blatantly illegal "remedy"? It means they are dead in the water, and know it, but will still shamelessly persist in attempting to intimidate the timid and confuse the confused for as long as it appears to be working...
As expected (and predicted on this page long ago), district court judge Nancy Edmunds has refused to abandon her February 26 accommodation of the IRS in its PR "lawsuit" against my wife and me, and re-affirmed the same on May 2. Again, though disappointing, this came as no surprise. Indeed, our notice of appeal was filed weeks ago.
As usual, we are all reminded in her rulings (here and here) about how wrong anyone would be to contend that "wages are not income" (no argument here, of course). No mention is made whatsoever of what is actually pointed out in CtC (such as that not all earnings are "wages"...).
As has been the case previously, being unable to dispute what really IS said, the court says that what is said is what it really is not, in an attempt to transform it into something the court CAN dispute. In so doing, the court is once again implicitly admitting that it cannot dispute what is actually said, just as its Constitutionally impermissible (and thus pointless) attempt to coerce changed testimony on our tax returns implicitly admits that without our sworn declaration that our earnings were, in fact "income", they are, in fact, not, and the government can lay no lawful claim to a tax thereon.
One can't help but picture a child with its hands over its ears, its eyes tightly shut, and its mouth making loud noises in order to drown out unwanted words...
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FOR IMMEDIATE RELEASE
Judge Orders Michigan Couple To Testify Against Themselves
Judge Edmunds (described by The Ann Arbor News and The Grand Rapids Press as guilty of perverting justice in another recent case, as well) granted a DOJ- and IRS-requested “summary judgment” in a lawsuit attempting to force the Hendricksons to change sworn testimony on their tax returns in order to give the federal government a pretext for claiming the couple owed income taxes in 2002 and 2003.
The suit, and Edmunds’ “order”, are part of a sustained IRS effort to suppress revelations about the true legal nature of the income tax presented in Peter Hendrickson’s book, 'Cracking the Code- the Fascinating Truth about Taxation in America', which have had the tax agency in behind-the-scenes disarray for many years now. Since the book went to print in August 2003, readers have been steadily recovering every penny withheld from them in connection with the income tax from the federal and state governments -- including Social Security and Medicare ‘contributions’.
Nonetheless, the DOJ and IRS have made careful and deliberate use of the "order"-- posting press releases claiming a victory in court, without mentioning that the "order" purports to dictate the content of the Hendricksons’ sworn testimony, and thus is inherently void. The agencies also fail to mention that the reason this "order" was sought is that without a change in the Hendricksons’ returns, there is no legal pretext by which the government can claim that any tax is due from the couple for the years involved.
Along with issuing the “order” regarding the Hendricksons’ previous testimony, Edmunds also played her part in another IRS pretense by way of this “lawsuit”, involving agency-fabricated mis-statements of law it claimed were found in Hendrickson’s book. In constructing its “complaint”, the government asked Judge Edmunds to enjoin the Hendricksons from filing returns reflecting these fabricated, erroneous legal assertions.
Edmunds compliantly issued this additional meaningless injunction, barring the Hendricksons from filing any forms based on these IRS-invented “false and frivolous claims” which she says are set forth in ‘Cracking the Code’”. (These “claims”-- such as that “wages do not constitute income”, or that “only government workers are liable for income taxes”-- not only do not appear in the book, but are explicitly contradicted by the book.)
The tax agency then began announcing that Pete Hendrickson has been enjoined against acting on what is presented in his book, when Hendrickson and his wife have actually been barred from nothing by this “injunction”. (Such an injunction would be outside the power of the court in any event, since to tell anyone what he or she CAN’T say amounts to dictating what must be said.)
Judge
Edmunds did all of this without the formality of a trial, and despite the
fact that not only do official Treasury Department Certificates of
Assessment show that the Hendricksons owe no taxes for the years in
question, but nowhere in the complaint does the DOJ present evidence that
the Hendricksons owe anything or that their testimony is false.
'Cracking the Code-...' shows that the application of the income tax is far more limited than most Americans believe. It demonstrates how key terms in the code such as “wages,” “employer,” “employee,” “trade or business” and “self-employment” are explicitly defined in the law in order to limit the income tax to benefits of federal privilege, such as dividends from federally-controlled corporations, and compensation paid to federal officeholders. Earnings unconnected with such privilege are not subject to the tax. Unaware of these special definitions, most Americans give the words their common meaning, fill out and sign their tax returns accordingly, and mistakenly pay taxes they do not owe.
Indeed, each and every month since the filing of this "lawsuit" more than two years ago, an average of more than $83,000.00 worth of subsequent victories have been shared with the world by upstanding CtC-educated Americans, an even higher figure than had been the case for the several years before this latest effort to suppress the book began. The only differences between pre- and post-"lawsuit ploy" is that now many more state governments (31, so far) have joined the feds in acknowledging the truth about the law revealed in CtC than had done so before.
This discrepancy between rhetoric and reality is broad and consistent. Six other "lawsuits" were announced at the same time as the one against the Hendricksons, each targeting CtC-educated filers carefully selected for their locations around the country so as to provide a pretext for a nation-wide press release on the matter. Two of the others targeted by this publicity campaign have stood their ground and are in the appellate courts dealing with district court rulings similar to that issued by Judge Edmunds.
The other four targets of these "lawsuits", however, surrendered to government harassment and declared that they had perjured themselves on their original filings. Nonetheless, although the DOJ and IRS touts these cases as "victories", the reality is that the government gratefully accepted new filings from these folks and then quickly slunk away without a backward glance. There have been no charges or other proceedings in connection with the repudiated original filings. In fact, the "righteous and victorious" feds formally agreed to take a hike in exchange for the new filings.
Not one such "lawsuit" has since been filed against any other of the hundreds of CtC-educated filers whose upstanding victories on behalf of the rule of law are posted on losthorizons.com each and every week, or the thousands more who have enjoyed such victories without having been so generous of spirit as to share them. At least three of the victims of these seven "lawsuits" have gone on to secure subsequent complete refunds even after having been singled out for this "special attention".
The simple fact is, while the DOJ and Judge Edmunds work to suppress Hendrickson’s book, and the IRS floods the media with disinformation and fear, the hard evidence-- the words of the law, dozens of Supreme Court rulings, the ongoing stream of complete refunds and everything else-- remains squarely on the side of the liberating revelations in 'Cracking the Code- the Fascinating Truth about Taxation in America'.
CONTACT: Pete Hendrickson E-mail: phendrickson ‘at’ losthorizons.com
For a quick introduction to the truth about the tax, see www.losthorizons.com/Intro.pdf
THE Department of Justice (sic) FINALLY filed its Appellee's Brief on August 13. It is an astonishing piece of work: sprinkled with easily-demonstrated misrepresentations of material in the record; dozens of entirely inapposite case citations (and none actually relevant); carefully incomplete excerpts of statutes; and a steady shifting of argument from one effort to dodge its burdens to another (since it can't carry any of those burdens...).
Most notable, however, is the fact that the substance-free, straw-grasping, mendacious character of this brief, which is thoroughly laid out in the reply posted below, is a complete surrender to the accuracy of CtC on the law in every respect (and a surrender in this case on the merits, as well).
Read the reply through. If you didn't already understand that all you need to do is read the book, rise to act, and spread the word, you will now.
9/14/07 OUR REPLY TO THE DOJ'S DESPERATE EFFORT TO EVADE REALITY HAS BEEN FILED Enjoy.
(Two Memorandums of Law accompanying this reply brief are linked from within the file above.)
An Appeals-Court Panel Has Now Played Its Ugly Little Part In This Charade... ("We've been sitting on this for almost a year-- just like the district court did-- because like the district court, we can't dispute anything Hendrickson says, and we'll lose our spot on the cocktail party "A" list if we admit that outright. But we've got to do something, 'cause we're looking really lame here...")
When Charles Bassett first emailed me that he was commissioning a cartoon by the very accomplished Vic Lockman about the sly abuse of judicial process being deployed to intercept and dispel ever-growing public awareness of what is revealed in CtC , he included a preliminary sketch Lockman had done, asking if there was anything in the sketch that I thought needed tweaking. Here's that first sketch:
I was very appreciative of Charles's stepping up to help with this critical issue, and delighted with the notion of a picture that could speak a thousand words and probably communicate a whole lot better than I manage to do. I did ask that some changes be made, though.
My initial reaction was to observe that although Lockman's design reflected what might typically be imagined as the relative demeanors of the actors in this affair-- overbearing and threatening "ignorance tax" parasites, and helpless, victimized citizens-- this is not what's really going on here. Quite the contrary, in fact.
While Lockman was entirely accurate in his pithy expression of intensely-focused government lawlessness in this first rendering, the deeper and far more important reality of this situation is that the "ignorance tax" parasites are in a full-scale defensive desperation mode. This is undeniably manifest in the very lawlessness they, like cornered rats, have found themselves obliged to attempt.
Think about it. Never in the history of America has anyone been ordered by a court to testify as dictated by the government! (This makes for my third historic accomplishment: the first to ever secure the return of Social Security and Medicare extractions; the first to force the DOJ to ask a court to dismiss IRS "enforcement" efforts-- and not just once, but three times; and now one of the first two Americans to face a court order to testify as dictated by the government...).
The very concept is so bizarre, so illegal, and so alien to our tradition that upon hearing of it many Americans actually suffer a cognitive dissonance seizure and become temporarily incapable of even understanding what they've just been told. Eventually such folks manage only to mumble, "I didn't know they could do that...". The obvious fact that "They CAN'T do that" only sinks in after long reflection in such seized-up brains.
Sometimes even just time to reflect isn't enough, due to the effect of the special mental fog associated with the "income" tax in the minds of many folks, thanks to decades of its diligent implantation and cultivation by the beneficiaries of ignorance and misunderstanding of the subject. That fog causes those not accustomed to focused consideration of legal matters to harbor the sense that the tax is somehow outside of the legal boundaries to which everything else is subject. I have found that in some cases the only way I can cut through that fog and re-establish communication with such a seized-up brain is by asking the individual to imagine the government trying to order someone to profess Buddhism to be true, correct and complete to the best of his or her knowledge and belief under penalty of perjury.
Another, more nuanced but more pointed analogy (bearing in mind that the correspondent involved has no idea of what "income" actually is), is to ask that it be imagined that the tax on "normal income" is 15% and the tax on "capital gains" is 30%; and the government is ordering its target to declare what was really "normal income" to be "capital gains" to the best of his or her knowledge and belief under penalty of perjury. (Understand that even if such an order concerning personal knowledge and belief could be legitimate under any circumstances, it only could be so because the government already possessed objective and unchallengeable evidence that the ordered attestation was true, in which case the order and the attestation would be completely pointless...
At a minimum, in such circumstances, the government would simply execute a return of its own concerning the matter, and proceed without pause accordingly. It does not, of course-- and, in fact, in regard to annual returns it has been explicitly prohibited from executing a return no matter what it imagines, or wishes to be imagined, to be true.
On the other hand, if the government DOESN'T have that objective and unchallengeable evidence, and since it is prohibited from acting as though it does in any event, it clearly doesn't have any proper business insisting that anyone behave as though what it wishes to be attested to is actually true, does it? Now, is that fog starting to lift?)
The attempt of this lawless measure is also, of course, inescapably revealing of an utter lack of alternative recourse. If the "ignorance tax" parasites had any legal basis upon which to dispute the legal truths presented in CtC, it would have long-since been utilized. There is no such legal refutation of CtC to be had, because it is completely correct. It is also the death of the "ignorance tax" parasites' long-running good thing. Those parasites know this full well, and they will try anything to halt the spread and the use of this knowledge.
Anyway, Charles passed my view of the matter along to Vic Lockman, who clearly had a light-bulb moment and "got it" completely. His revision sketch showed it:
After getting copied on this revision, I focused on details needing tweaking. The sharp-eyed reader will have seen one significant item I asked Charles to have Vic change (as distinct from the insignificant stuff like my having more hair in this version than I've had since I was twenty, and my brunette bride being portrayed here as a blonde...). The item to which I refer is the ID tag on the judge fleeing from the bench. Vic, for some reason (maybe prescience) had labeled the judge the "6th Circuit", meaning the Sixth Circuit Court of Appeals, the appellate court to which district court judge Nancy Edmunds' "ruling" had been appealed. I asked that this be changed to "Federal Courts", because, hey, the circuit court hadn't issued an opinion yet (despite having had the case for months and months), and who knew what to expect?
I could have left that as is, it turns out. Last Wednesday, June 11, a three-judge-panel of the circuit court (actually, only two judges from the circuit court, along with a guest from a New Jersey district court) disgraced itself with six pages of "not for publication" empty rhetoric intended to keep the "ignorance tax" gravy-train wheezing down the track for another stolen mile (a link to this "opinion" will be found below).
This panel "opinion" will of course be contested ( even though it does nothing more than uphold an inherently meaningless district court ruling, as is discussed here). As usual, filings in that process will be posted as they are made.
However, I encourage everyone to get involved at this point. While unlawful court orders are inherently void, they are also inherently dangerous to the rule of law, and should not be allowed to stay "on the books". This is especially true in the case of the uniquely pernicious order regarding testimony involved here.
Think about it. The notion that the state can dictate the contents of a sworn statement is farther reaching and more dangerous than even the assault on habeas corpus. Denied habeas corpus, one can be prevented the opportunity to challenge a detention for the duration of that denial, but should the writ again become available, or should any judicial proceedings occur for other reasons, one could then contest the state's charges or assertions. If one can be made to testify as desired by the state, however, there will be nothing to contest at all, whether a courtroom is available or not.
This is not "just a tax issue" either, of course (nor ever has been-- it is a speech issue, and a due process issue, and a rule of law issue...). Although the utterly corrupt authority sought by the state in the instant case would be bad enough even if just confined to the issue of who owns, or can lay claim to, property (as would be its effect if applied to tax returns, as is proposed in the instant case), only the most naive would imagine for a heartbeat that it would long remain so confined.
Furthermore, the "dictated testimony" issue is not the only step into the wilds of lawlessness taken by the courts in this case. Although I've not made much of it in previous posts, the district court's assumption of the authority to make "findings of fact" based on the simple expedient of ignoring all evidence inconvenient to its plaintiff client, and to then award summary judgment in the plaintiff's favor based on those "findings", is, itself, breath-taking in its creative corruption.
There are other, similarly brazen offenses against the law and due process involved in this case, as well. The district court found itself compelled to commit a variety of offenses in order to evade the legal realities it faced, and to put so much makeup on its pig that the casual observer will mistake the creature outright, or decline the burdensome effort to penetrate its disguise. All of these are bad enough in their deployment in this case alone, but also contribute heavily to the erosion of the rule of law generally.
Amicus briefs, letters, and phone calls both in protest of this outrageous opinion and in support of a petition for re-hearing by the full Sixth Circuit Court would be very helpful right now, as would efforts to accomplish informed publicity of this affair. Escalating efforts to spread the truth about the tax would be a good thing, too.
***
Here are a few early observations about what is presented in this "opinion" and what is (much more significantly) left out of it:
First, and generally, this "opinion" is distinguished by a complete lack of any reasoning whatsoever. All it offers are unsupported, pompous declarations (as is also true of the district court "ruling" it defends).
Clearly, the audience is intended to imagine that the three political appointees on this panel, who have never made an in-depth study of the legal issues involved-- or, at least, show no evidence of having done so here-- nonetheless possess secret knowledge about those issues that they need not deign to reveal. Somehow (we are to quietly and humbly accept, without expecting explanations from our betters) that secret knowledge contradicts the words of the laws (and those of the Supreme Court, as well), and has entirely escaped the tens of thousands of CtC readers who have closely studied the subject for years, who have clearly come to different conclusions, and who are routinely demonstrating their superior understanding to the tune of unprecedented and uninterrupted victories for years now, while simultaneously confounding all efforts to turn back the tide of truth rolling over the long-standing and entrenched lies this panel seeks to protect.
The hoped-for quietude of the audience is not taken for granted, though. The "opinion" starts right out with a gratuitous ad hominem attack on me, reciting a well-worn DOJ (sic) misrepresentation of a tax protest in which I had some involvement-- more than 18 years ago. Since even without consideration of the distance in time between then and now the reference to this matter is utterly irrelevant to the court's proper business in considering this appeal (as well as revealing and nourishing an undisguised, grossly improper bias against a litigant), it is clear that the purpose of this inclusion is the same behind every ad hominem attack-- to distract from the fact that the panel (and the government plaintiff that the panel apparently views as its client) can make no substantive (or legitimately substantive) arguments against mine.
This ad hominem ploy is a transparent, corrupt attempt to influence those reading this "opinion" to accept the subsequent pretenses and gibberish in the opinion itself without applying any of the critical analysis under which it entirely crumbles, and to dissuade such readers from bothering to read the briefs filed in the case in order to know just what is actually at issue, and how this opinion is a complete evasion of those issues.
The panel includes an interestingly-careful reference to the contents of CtC in this ad hominem paragraph, describing it as a book, "in which [Hendrickson] apparently advocates improper schemes others have followed to avoid paying federal income tax." Good dancing, that... The one other reference to the book in this "opinion" is similarly circumspect, declaring merely that the panel doesn't believe that the government can be prohibited from "suggesting" that CtC "promotes false or fraudulent tax schemes", at least not simply because the the DOJ itself shut down three prior IRS efforts to declare the book to do so in three different courts across the country in 2004 and 2005.
The next page of this little dissemblage is burned listing the various and extensive filings in the farcical "proceedings" in the district court (see this for some discussion of this subject). Not a word is included concerning the substantive contents or significance of these filings. (The panel does, however, manage to work the word "fraudulent" into this section twice. This is despite the fact that the government never pushed the envelope so far as to actually allege fraud in this case, which it would have a very hard time keeping away from a jury even in a pet judge's courtroom, and would have actually had to try to prove... "Fraudulent" doesn't appear even once in any of the district court's multiple orders and rulings.)
Then the panel proceeds to ramble through a few paragraphs of carefully-worded misrepresentations of the issues in the case, either adopting assumptive language and characterizations favoring the plaintiff's preferred outcome or evading issues fatal to the plaintiff's preferred outcome. For instance, in "discussing" the propriety of the district court's grant of "summary judgment" to the plaintiff, and the relevant burdens of proof, the court picks a case to cite in this regard (Celotex Corp. v. Catrett, 477 U.S. 317 (1986)) in which it was the defendant that moved for summary judgment, not the plaintiff (contrary to the instant case); and proceeds to declare (rather incoherently-- but deliberately, as we shall see) that, "Thereafter, the nonmoving party must present significant probative evidence in support of the complaint to defeat the motion."
This case, and its "analysis" presented by the panel, is gibberish in regard to the case being ruled upon. In the case the court is actually (supposedly) considering, the plaintiff was the party moving for summary judgment, and all we (the nonmoving party) had to do was dispute the plaintiff's assertions in order to defeat the motion, as the Supreme Court observes:
By offering the inapposite language that it does, "Thereafter, the nonmoving party must present significant probative evidence..." the panel is trying to give the impression that we bore some burden of proof in regard to this motion for summary judgment when that is the exact opposite of what is actually true. I wonder why the panel didn't quote the far more comprehensive and actually apposite language of Anderson v. Liberty Lobby and/or Hunt v. Cromartie instead? We had provided it to them in our briefs...
The sole "evidence" offered by the plaintiff in the entire case is an affidavit plainly written by the plaintiff itself, and signed by someone with no direct personal knowledge of anything more than having seen documents (written by still others) on which, plaintiff's affiant claims, it is asserted that I received certain amounts of "wages". Nothing but entirely unsupported language in the complaint even purports to assert, much less establish, that my wife received "income". That's it. (See this.)
Both Doreen and I introduced affidavits explicitly contradicting these assertions. Thus, as far as the summary judgment issue is concerned, a plain controversy existed; our assertions and all reasonable inferences from them had to be taken as true (meaning that the plaintiff's had to be taken as unproven, at least) and summary judgment in favor of the plaintiff was unambiguous error.
Unsurprisingly, the appellate court panel offers no substantive analysis of the case upon which it is actually issuing its opinion. It has nothing whatever to say about the plaintiff's evidence (or lack thereof), nor ours, nor presents anything at all on this subject, despite admitting that it is obliged to consider summary judgments de novo (that is, "afresh", as a "new trial"). Instead, the panel merely refers to selected issues we raised in our appeal without discussion (while carefully avoiding others completely), and just declares that, "the district court properly granted summary judgment for the government in this case." No wonder this ruling is "NOT RECOMMENDED FOR FULL TEXT PUBLICATION".
What little there is that is intended to pass for discussion amounts to a total of two paragraphs of unsupported disparaging assertions. Even these entirely unbalanced assertions are nonetheless worded with care.
For instance, the panel proclaims that, "The United States plainly may sue for return of taxes erroneously refunded pursuant to 26 U.S.C. § 7405(b)". Sure. This is undisputed.
However, that's not at issue in the matter before the court. What is at issue relevant to this pronouncement is that what the government is seeking to accomplish here is a seizure of property which has never had the character of "taxes" in the first place.
The panel goes on to embarrass itself more thoroughly further on in this paragraph: "[T]he Hendricksons' assertion that the government lacks standing under 26 U.S.C. § 7405(b) to seek return of taxes not already determined is wholly unsubstantiated..." (Emphasis added.) We made no such assertion, of course.
Quite the contrary, we asserted that the government lacks standing under 26 U.S.C. § 7405(b) to seek return of amounts not already determined to be taxes. 26 USC 7405(b) provides for suits to recover “any portion of a tax... ...refund of which is erroneously made”. It doesn't provide for suits to recover, “any portion of a deposit...” or anything else. Amounts withheld or paid in-- even theoretically in connection with the tax, or under the protocols associated with the tax-- are merely deposits and not taxes unless and until they have been determined to be so by the defining of an associated liability. This very court has said so (as have the Supreme Court and virtually every other circuit court, along with countless district courts): “[Withheld or paid-in amounts] are, as it were, payments in escrow. They are set aside, as we have noted, in special suspense accounts established for depositing money received when no assessment is then outstanding against the taxpayer. The receipt by the Government of moneys under such an arrangement carries no more significance than would the giving of a surety bond. Money in these accounts is held not as taxes duly collected are held but as a deposit made in the nature of a cash bond for the payment of taxes thereafter found to be due.” Rosenman v. United States, 323 US 658 (1945) “This much is clear: (1) a remittance is not per se 'payment' of the tax; (2) a remittance that does not satisfy an asserted tax liability should not be treated as the 'payment' of a tax; and (3) an essential factor in 'payment' before assessment is the satisfaction or discharge of what the taxpayer deems a liability.” Ameel v. United States, 426 F.2d 1270 (6th Cir. 1970) “[Rosenman Court Chief Justice Felix Frankfurter says] "the tax obligation did not become defined until April 1938," id. 323 U.S. at 662 (emphasis added); that is to say, not until the assessment was made. The key here is that something, other than the mere remittance of money, must happen to define the amount of the obligation. That could be an official assessment by the IRS, or a tax return or other official document signed by the taxpayer which acknowledges the amount of the obligation.” Ewing v. United States, 711 F. Supp. 265 (W.D.N.C. 04/19/1989) “...the Fifth and Eighth Circuits have held that Rosenman created a per se rule that whenever the taxpayer has somehow disputed liability for a deficiency, there can be no payment of taxes until there has been a formal assessment. United States v. Dubuque Packing Co., 233 F.2d 453 (8th Cir. 1956); Thomas v. Mercantile Nat'l Bank at Dallas, 204 F.2d 943 (5th Cir. 1953); Wiltgen v. United States, 813 F.Supp. 1387 (N.D.Iowa 1992); Estate of Goetz v. United States, 286 F.Supp. 128 (W.D.Mo. 1968); see also Ford v. United States, 618 F.2d 357, 359-61 (5th Cir. 1980) (questioning the wisdom of Mercantile Nat'l Bank but following it as circuit precedent); Schmidt v. Commissioner, 272 F.2d 423, 428 (9th Cir. 1959) (discussing Mercantile Nat'l Bank favorably). The Mercantile Nat'l Bank court in particular emphasized the illogic any other result would work by allowing the statute of limitations on refund claims to run against the taxpayer before the tax- payer knew what to claim. 204 F.2d at 944. The Second, Third, Fourth, Sixth and Federal Circuits, on the other hand, have embraced a more open approach. Blatt v. United States, 34 F.3d 252 (4th Cir. 1994); Cohen v. United States, 995 F.2d 205 (Fed. Cir. 1993); Ewing v. United States, 914 F.2d 499 (4th Cir. 1990), cert. denied, 500 U.S. 905 (1991); Ameel v. United States, 426 F.2d 1270 (6th Cir. 1970); Fortugno v. Commissioner, 353 F.2d 429 (3d Cir. 1965), cert. dismissed, 385 U.S. 954 (1966); Charles Leich & Co. v. United States, 329 F.2d 649 (Ct.Cl. 1964); Hill v. United States, 263 F.2d 885 (3d Cir. 1959); Rose v. United States, 256 F.2d 223 (3d Cir. 1958); Lewyt Corp. v. Commissioner, 215 F.2d 518 (2d Cir. 1954), aff'd in part, rev'd in part on other grounds, 349 U.S. 237 (1955); Crosby v. United States, ___ F.Supp. ___, 75 A.F.T.R.2d 95-1718 (D.Vt. June 19, 1995). These courts have held that a remittance prior to a formal assessment may be a tax payment. Exactly when that happens depends on the circumstances of each case, the lack of an assessment being only one consideration among many. The cases suggest that a number of factors should play an important role besides the timing of the assessment, including the taxpayer's intent upon making the remittance, how the IRS treats the remittance upon receipt, and when the tax liability is defined. See Ewing, 914 F.2d at 503; Ameel, 426 F.2d at 1273." We have not addressed the question raised by Rosenman and discussed in Rev. Proc. 84-58. Our decision in Plankinton v. United States, 267 F.2d 278 (7th Cir. 1959), cited Dubuque Packing and Mercantile Nat'l Bank favorably, but the government had conceded the issue in Plankinton and agreed that remittances made prior to the defining of a liability were not tax payments. Id. at 280.” Moran v. United States, 63 F.3d 663, 666-667 (1995) (Emphasis added.) There is no ambiguity here. Until an amount is defined as a tax (and in a procedurally-proper manner), it is NOT a tax, and a reversal of its having been refunded cannot be sought under 26 U.S.C. § 7405(b). This is not a minor quibble over semantics, it's a serious legislative specification. As the United States Supreme Court observes:
Furthermore, that each word in a statute is to be given its due is a fixed standard of statutory construction-- as the IRS reluctantly demonstrated when it returned billions of dollars to millions of Americans in 2007 after repeatedly losing legal contests in circuit courts across the land over the meaning of the word "and" in a statute...
The three-judge-panel views all of the above "patently meritless" (which apparently translates as "seriously problematic to our client's purposes"), and thinks my wife and I should be punished for even daring to point it out. Maybe we should sue every single federal court in the country-- including the Sixth Circuit, and Congress as well, for having so cavalierly misled us.
Were this opinion not a complete and transparent sham, I'd have to wonder if the problem is that I've written all my briefs in English...
Here's the Dick and Jane treatment: The government has to have had it previously established that the money it refunded BELONGED TO IT in order to bring suit under 7405(b). That's what makes it a "refund of tax" and is also a necessary predicate to it being "erroneous" (except in a case in which the amount involved was handed over to a third party with no claim of ownership, such as if the government sent your deposited property to your neighbor by mistake). The return to its rightful owner of money that doesn't belong to the government, after the requisite procedural steps have been undertaken, is not "erroneous".
In this case, the government is proposing to "recover" amounts which never belonged to it in the first place, to which it can demonstrate no claim and never could, and in regard to years for which the the official assessments have already been established to be $0.00. Indeed, under the circumstances involved here, the government isn't able to sue us over amounts relevant to those years UNDER ANY LEGAL MECHANISM AT ALL, much less under 26 U.S.C. § 7405(b).
Elsewhere in this same paragraph, we also find, "Moreover, 26 U.S.C. § 7402(a) gives district courts the authority to grant injunctions "necessary or appropriate for the enforcement of the internal revenue laws"". Sure, to that, too.
However, this is also not at issue in the matter before the court. What is at issue relevant to THIS pronouncement is that the plaintiff never identified (nor could identify, nor even attempted to identify) any internal revenue laws which the sought-after injunctions would serve to enforce (even if they weren't flagrantly unconstitutional). Not one.
On the contrary, as we pointed out in detail in our filings, there are numerous internal revenue laws which the sought-after injunctions would VIOLATE (along with various witness-tampering felonies, and a good part of the Bill of Rights). There ARE no "internal revenue laws" commanding anyone to attest on a tax form what he or she does not believe to be true, but there is a whole body of internal revenue law explicitly requiring the government to accept the testimony freely made on annual tax returns, a requirement which, it goes without saying (to anyone but a corrupt federal judge, it appears), would be unlawfully subverted by compelling a filer to testify only as approved by the government.
This all must be VERY "patently meritless", since the three-judge-panel, even after taking almost ten months to issue this well-polished gem of an opinion, elected to not say a word about any of this in the two paragraphs it found sufficient to judiciously analyze a case in which well over 450 pages of filings have been made...
This bears repeating. Although the panel purports to briefly address the points raised in our appeal, it carefully avoids any reference to the plain and straightforward statutory requirements that amount of "income" filer's return be received as the amount on which the tax is to be assessed and collected, the presentation and discussion of which is the very first issue raised in our appeal.
This silence mirrors the complete avoidance of this entirely dispositive, fatal-to-its-case legal reality by the plaintiff-government throughout every word of its hundreds of pages of filings in this case, which silence should make unmistakably clear even to the most skeptical observer that neither the courts nor their client can dispute this controlling point of law. If either could do so, they certainly would have done so here. Instead, they simply try to act like it doesn't exist, and hope that this case never gets the public attention is deserves.
Several other of our challenges to the district court's "ruling" go interestingly unremarked in this eye-wash of an opinion, as well. These include, for example, the inconvenient fact that the Declaratory Act prohibits the issuing of injunctions such as those sought by the plaintiff in this case; the fact that even though this case shouldn't be allowed to proceed at all, if it does, it belongs before a jury per the Seventh Amendment; and the fact that irresolvable First and Fifth Amendment, and due process issues inhere in the notion of dictating testimony to my wife and me. |
