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The liberating truth about the "income" tax is turning those who would evade it

Every Which Way But Loose

A collection of undeniable evidence of the correctness of CtC


Do you remember those old sci-fi movies (and numerous 'Lost in Space' and 'Star Trek' episodes) in which an evil robot or a computer collapses into terminal dysfunction after being presented with data that "does not compute"? The machine would flail about dangerously for a bit (or smoke and shake, and threaten to explode) before finally going limp, silent and harmless.



Some CtC Warriors are being drafted to play the part of the intrepid heroes of these space operas lately, with federal and state "income" tax agencies in the role of the neurotic robot.

SINCE AUGUST OF 2003, when the revelations of CtC were first published, tens of thousands of readers of 'Cracking the Code- The Fascinating Truth About Taxation In America' have taken control of their own resources, in accordance with, and respect for, the law. The total amount reclaimed by these good Americans so far is upward of several billion dollars.

During the same period, the IRS has engaged in a desperate struggle to regain its hold of fear and confusion over those now equipped with an understanding of the long-hidden secrets of the "income" tax, and to stop that understanding from spreading. This effort has involved the resort to many (and increasingly) bizarre evasions and theatrics.

IN THIS SERIES, we take a close look at many of these gimmicks, ploys and dodges. The action in these episodes will range from silly one-shot, quickly-abandoned agency stalls to drawn-out, elaborate efforts to resist or evade or discourage CtC-educated filers ending in dramatic slap-downs of the law-defying tax agency.

One consistent feature of all of these episodes is the special clarity with which they illustrate the accuracy and completeness of what CtC reveals about the "income" tax. Unlike the vast majority of CtC-educated refunds and other victories in applying the law in which the deep vetting to which every claim is subject is done out of view, with no evidence of the process except the filing and the check or transcript, what happens in the cases highlighted in this series takes place only after unambiguous, close tax-agency attention to the claim.

Thus, these cases present a wake-up splash of reality to those who struggle to persist in denial about the truth, completeness and correctness of CtC (some of whom actually argue with a straight face that the hundreds of thousands of complete refunds issued over all those years now from the feds and more than three dozen state and local tax agencies are a sustained "slip through a crack"!).

Here it is in a word: NOT ONE OF THE SURRENDERS DOCUMENTED IN THIS SERIES WOULD OR COULD HAPPEN UNLESS THE FILINGS AND CLAIMS MADE WERE CORRECT AND PROPER UNDER THE LAW. NOT ONE. Each of the victories presented here took place with the knowledge and participation of tax agency personnel. In almost every case, those victories took place over and despite the outright resistance of those officials.

Similarly, NOT ONE of the contortions and evasions documented in this series would be attempted unless the filings and claim against which they are deployed is correct and proper under the law. It is the insurmountably correct character of these educated filings that compels the tax agencies to resort to smoke, mirrors and bluster.

Because these things DID and DO happen, the correctness of CtC-educated filings and claims, and the view of the law on which they are based, is indisputable.


Ben Pezzano's Slap-Down Of Opportunistic IRS Mendacity

BEN FILED NOT ONLY an educated return and claim concerning 2022 withholding totaling $7,884.03 early this year (albeit with a little confusion over the proper way to rebut an erroneous K-1). He also provided a very clear cover letter explaining his filing. (See both here.)

Nonetheless, the first response by the IRS was to try its ridiculous and corrupt pretense of acknowledging that Ben had had no tax-relevant "income" and owed no tax, but was somehow entitled to keep what had been withheld from him as Social Security and Medicare taxes (by pretending that those amounts had not been withheld, or don't qualify as "federal income taxes", and falsely reporting the amount shown on line 25(d) of Ben's 1040 to be only $2,493 (just as discussed more fully here in regard to the same corrupt treatment visited upon Lance Cole):

Immediately upon receiving the partial refund pretense, Ben, drawing on the comprehensive legal resources I have presented in my books and on LHC over the last 20 years, fired off this cogent and concise reply, spelling out the relevant law and facts in detail, and demanding proper treatment by the tax agency. The IRS responded with a bizarre, disconnected letter about an amended return, seen here. Again, Ben fired off a straightforward and sensible reply pointing out the relevant facts and making clear that he was a grown-up American fully committed to standing his ground and enforcing the law.

After these exchanges helped the IRS see the light, the agency finally threw in the towel and got right with the law, returning all of Ben's money, with interest:



Ruben of California's Christmas Carol

IN MARCH OF 2021, the excellent Ruben of California was minding his own business like every good American should when there appeared before him an unexpected sight. It was a ghost of Christmases past-- the spittle-flecked, chain-rattling specter of a junk-yard dog whose tag bore the cryptic runes: IRS.

Ruben remembered well the years gone by in which the sight of this crooked and mangy beast had struck fear into his heart.

This time, however, even though in its yellowed and carious fangs the grim and grimy cur clutched a paper titled "Notice of Deficiency":

...by which it was alleged that contrary to his own testimony of having received $0 in "income" during 2017, Ruben had actually received more than $61K in "income" that year and owed $8,633.00 in tax, Ruben just smiled and muttered, "Game on."

Not quite a year-and-a-half later, a new vision had appeared. This time Ruben was visited by a right jolly old elf, laden with gifts. The government effort to scam thousands of dollars from Ruben to which it had no claim collapsed into an admission that no deficiency existed, yielding an October, 2022 Tax Court ruling in Ruben's favor, just in time to brighten the upcoming holidays:

Merry Christmas, Ruben!!

ONE IMPORTANT CLARIFICATION needs to be made so no one is misled by the "nor overpayment due to" portion of the ruling above. Ruben has already received the overpayment he had claimed in the filing involved:

As seen, the refund had been diverted as a credit against an alleged balance owed for another year, which Ruben disputes. In addition to petitioning for the voiding of the deficiency allegation, Ruben had asked the court to order his "collected" overpayment converted to a check.

The government had argued in response that recovery of that already-refunded-but-diverted overpayment had to be by a legal action specifically addressing the prior year "balance due" allegation, which was not relevant to the notice of deficiency at issue in the instant case (and which therefore would not be within the Tax Court's jurisdiction in this case). In conference with the government's attorney upon announcing its intention to surrender its deficiency claim, Ruben recognized the merits of that argument and agreed to take the overpayment issue off the table on which it never really belonged in the first place.

OF MATERIALS IN THE CASE, I think those of broadest interest and usefulness to this audience are Ruben's Petition (find it here); his January 10, 2022 Motion for Default and Entry of Decision in Petitioner's Favor, and Motion to Order Refund of Amount Collected (find it here); and his April 5, 2022 Declaration of Facts (in the end never filed, but informative, nonetheless-- find it here). Exhibits to these pleadings have been omitted, but their nature and contents are specified in the citing documents.


Piotr and Stephanie Bondaryk Face Down The Junk-Yard Dog

PIOTR AND STEPHANIE BONDARYK had to deal with a bit of tedium over a spurious IRS "Notice of Deficiency" alleging a big tax and penalties liability concerning 2017. As will be seen, when Pitor and Stephanie confidently and resolutely stood their ground, the bogus allegations melted away.

The story began when the Bondaryks received this CP2000 "Proposed Changes" notice alleging shortfalls in their 2017 return-- which had already been accepted, processed, and refunded in full (as can be seen on this page):

Piotr and Stephanie responded within a few weeks with this pointed refusal to play along. The IRS then sent a "we need time to think about what to do now" letter.

The delay letter was followed, a bit past the 60 days for which the agency had asked, with another letter. This one declared that "the information we have received was not sufficient for us to change our determination [on the basis of which the "change" proposal had been made]", and went on to tell Piotr and Stephanie to expect a "Statutory Notice of Deficiency" within 3 or 4 weeks. 11 days later, that notice arrived:

Confident in their CtC-educated knowledge of the tax and the law-- and resolute in their respect for the latter, even in the face of its "official" enemies-- on April 15, 2020, Piotr and Stephanie again expressed their dispute with the now more-formalized false allegations of liabilities by which the IRS hoped to reverse its original and inconvenient loss of revenue to the couple's proper claim of refund.

Months went by, until August 20 of 2020, when the IRS sent its next letter. This one acknowledged receipt of the Bondaryk's last response to the paper assault, warned them that the now-long-since expired deadline for petitioning Tax Court was not extended by their response, and told the couple that the agency needed another 60 days to ruminate on its conundrum of having targeted its nonsense at well-educated real Americans who simply would not back down.

Piotr and Stephanie promptly slapped the agency sharply, with this. Two months later the IRS replied-- but not to Piotr and Stephanie's most recent broadside. This latest agency letter purported to reply once again to the April 15 response Piotr and Stephanie had made to the "Notice of Deficiency", but this time specifically challenging the rebuttal of a payor's "wage" allegations which is included in the couple's return.

Piotr and Stephanie replied to that challenge of their "wage" rebuttal on February 3, 2021, with this specific restatement/clarification of their return testimony. The next thing to arrive from the IRS was a double-down on the scare notices:

However... when a few more months had gone by WITHOUT "payment [being] received immediately", the tax agency threw in the towel. On June 10, 2021, it sent this letter acknowledging Piotr and Stephanie's February 3 response and saying, "we need 90 days" to "process all your information". About 9 weeks later came this surrender notice:

Here is an account transcript from the agency reporting more-or-less all of this sordid little story.

CONGRATULATIONS to Piotr and Stephanie! They've stood tall for the rule of law, in the snarling face of a junk-yard dog.


Dane La Vigne's Demonstration

DANE LA VIGNE has secured a great victory concerning his $230,000 or so in earnings during 2014. To begin with, the IRS initially admitted Dane's earnings were not "income" (in the sense of being income tax relevant). The agency had dutifully refunded the $1,000 deposit Dane had sent in with his application for a filing date extension in April of 2015 and then reclaimed on his return filed later that year. It was thus (and properly) agreed that Dane's earnings were not of the specialized variety received for the performance of taxable activities, and by which a resulting tax liability could be measured.

But in 2016, some bad apple at the IRS decided to pretend the agency had made a big mistake and try to herd Dane back into a copper-top pod. The campaign began with this:

...to which Dane responded with this, the following October.

Meantime, a "proposed change" notice was run up the flagpole:

It was hoped that Dane would be overawed by this "official" expression, abandon his own knowledge of the provisions and particulars of the relevant law, and salute the "proposal" like a good little soldier given orders from above.

Not Dane. This man IS a good soldier-- but not the little kind who worships at the altar of the state.

Dane is a good soldier of the Founders' republic. He is a big, grown-up, real American man whose salutes are reserved for the principles of liberty and the rule of law.

Dane stood his ground and stuck to what he himself had learned to be true, by his own study and verification and reliance on his God-given powers of reason. After three long years of increasingly strident harassment and repeated officious pronouncements, including, among much else back and forth, this:




(to which Dane responded months later with a FOIA request for documents related to these purported assessments, and for which he received this in reply)




...and this:

...the IRS bluff, trickery and intimidation project collapsed in September, 2019, ending with these two flat-out white-flag acknowledgements:

It was a long pain-in-the-ass for Dane, but a capital victory in the end. Perseverance won this battle, as it does every battle with adversaries whose only weapons against solid, well-grounded and accurate knowledge of the law are fear and bluster.

Dane is still waiting for the other shoe to drop on the pretended "frivolous return penalty", giving him a chance to demand a hearing and start that nonsense on its way off-stage. Maybe that one will just ease off on its own steam, under the circumstances...

Meantime, isn't it great that Dane has learned the truth about the tax?

Wouldn't it be really great if everyone did?


David H.'s Remarkable 2008 and 2010 Victories

(Docs are linked throughout, either in the text or from images):

ON APRIL 15, 2009, David H. filed a perfectly normal CtC-educated return. David is a contractor, and has no withholdings to reclaim.

However, some of those paying David are ignorant of the true character of the tax and/or of the purpose and effect of "information returns". These folks produce and submit "1099-MISCs" making tax-related allegations about payments David receives, which David is therefore compelled to rebut lest they be taken as evidence of the conduct of taxable activities and consequent liabilities for tax.

As can be seen in David's return, he had several such 1099s to address in regard to 2008. In each such case, David testified that none of the payments he received from the issuers of these forms actually related to any taxable activity, and all told, he ends up with a return reporting $0 "income" and nothing owing in tax.

Nothing extraordinary here. But the 1099s David rebutted had alleged a total of more than $280,000 worth of taxable activities during 2008.

In January of 2010 some bad apple at the IRS going by the label "W. Brown" ("Wanda", as we are later given to understand) decided to try confusing, browbeating or intimidating David into reversing himself. Ms. Brown sent David a "CP2501", inviting him to agree that $280,916 of his earnings were from taxable activities, upon which the agency would calculate a tax for him and send him a bill:

David courteously declined.

NONETHELESS, THE UNUSUALLY PERSISTENT MS. BROWN figured she might as well try again (after all, she isn't spending her own money on these ventures...). Brown's next effort took an unfriendly turn, as she hunkered back into what really is more natural for junk-yard dogs-- growly threats. This time the proposal included a tax calculation (of $82,666.00) plus another $20,649 in penalties and interest, in the form of a CP2000:

David again responded as indicated by the IRS form (and with attachments as indicated on the certification of mailing).

Normally, even in a case in which the tax agency goes so far as to take a flutter on a "proposed change" ploy, once firmly slapped down, that ends the matter. Many examples can be seen throughout the EWWBL and Victory Highlights collections.

FOR SOME PERVERSE REASON, THOUGH, the "Brown" bad apple handling David's case hadn't seen the memo. On June 07, 2010, yet another CP2000 addressed to David over his 2008 filing disgraced the U.S. Mail, with a slightly plumped interest amount, but otherwise the same as the previous version:

Unbelievable! But this persistence is what makes this such a great story. Keep reading...

ONCE AGAIN OUR intrepid hero David gave his sling a whirl (though doubtless with some considerable impatience this time). But the hungry "Brown" just wouldn't go away. Instead she doubled-down (thus setting herself and her agency up for an even bigger tumble) with a "LTR3219 (Notice of Deficiency) on August 30, 2010:

Again David shot out a response, with restraint now truly remarkable, all things considered (and with, it must be said, references to "assessments" and "levy" that are unnecessary at this point, but considering the incoherence of the bad apple's behavior, some confusion can be forgiven).

This time, David's refusal to be intimidated appears to have brought "Brown's" incoherence to her attention, and set her back on her heels. The next thing sent out from whatever little federal fortress "W. Brown" lurks in was a stall request dated November 23, 2010, more-or-less saying, "Thank you for your correspondence... we need 60 days to figure out what to try next... Sorry for any inconvenience...".

60 days passed, then another 60. Finally, 137 days after the "we need 60 days" notice, David received the results of all the work "W. Brown" needed all that time to conduct-- a new flutter based on a new pretense (which David's handwritten note points out):

Though different in form, what we have here is really just another version of the CP2000 "proposals" David had already gotten several times. This is shown by the "If you agree with the changes..." language, which goes on to provide options for expressing disagreement, just as in the other version of this proposal.

So, 137 days of effort had yielded... just more of the same, with the rogue tax agent no further along in either supporting or achieving her goal of getting her hands on what is now alleged to a $107,066.76 liability. It looks like even bad-apple-Brown is very well aware that what she's been trying to glom onto is not actually a legitimate liability, doesn't it?

Needless to say, David had a few things to say in response to this same-old, same-old.

Two and a half months later, the IRS-- now represented by someone calling himself "Paul Morgan" finally had an answer for David: "Thank you for your correspondence... we need 45 days to figure out what to try next... Sorry for any inconvenience...".

NOW, THIS TIME IT REALLY WAS just about 45 days before the next thing arrived from the IRS about David's 2008 filing. And this time, the now unnamed actor at the agency doubled-down yet again.

The new notice is couched as a demand, and pretends that the issue of David owing the amount demanded was no longer a "proposal", but should be imagined to be settled. (Which is, let's remember, the IRS's whole meme, right? David earned money, so he must owe a tax, right?! What were they thinking of with all this "proposal" stuff before...):

But... at the same time the agency couldn't quite play it this way without a little safety valve admission-- again, now, from "Wanda Brown". On August 26, 11 days after Paul Morgan's demand, Ms. Brown sends the, "if you disagree" part of the package:

On September 19, another notice arrives, this one a bold-face threat:

On September 22, 2011, David sent his reply. As is seen, at this point David appears to have lost patience, and does a little "reading of the riot act" to the persistent parasites who have now been harassing him for nearly two years over a bogus claim their own consistent actions prove even they don't consider legitimate.

ON NOVEMBER 8, 2011, the whole thing descends into comedy. Suddenly David receives a letter described as a "follow-up" to an earlier letter purportedly sent to him more than two years ago, on September 27, 2009:

And guess what? Here again we have that "If you disagree" safety valve function, dropping things back into "proposal" status...

DOUBTLESS THOROUGHLY SICK OF THE WHOLE CHARADE BY NOW, David didn't even bother to reply until April of the next year, now 2012. After the lengthy cooling down period, David was again restrained in his reply (note: the date David gives to the November 8, 2011 letter is misstated as being a 2012 date).

Taking its cue from David (but really just because it was still simply struggling to think of ways to keep its pestering alive), the IRS then sat out for seven months, before sending another threat letter (its usual go-to solution when its got no actual legal cards in its hand...). This one purported to be a "Final Notice Of Intent To Levy" and notice of David's right to a hearing (over what it now claims to be a $127,318.78 liability).

On November 30, David shoots out a response (now more appropriately addressing the issues of "assessment" and "levy").

And again the seasons change...

Seven more months go by, and then, on June 7, 2013, David receives what purports to be a reply to his "correspondence received June 05, 2012" (a year earlier). No clue is given as to what this mystery correspondence is supposed to have been, but whatever it supposedly was, the IRS says it was FRIVOLOUS!!! (which would be a classic case of the pot calling the kettle black, if David had ever actually done anything frivolous...).

David didn't even bother to reply to this nonsense about a fictitious "correspondence".

SO, FOLLOWING ALL THE FOREGOING, we have three years of silence from the agency about David's purported liability for 2008, taking us to May of 2016-- more than 7 years after David's return was filed. Suddenly, on May 16, 2016, David gets an "Annual reminder of overdue taxes for 2008", now alleging a $147,334.65 liability:

Can you imagine David's reaction? His weary and disdainful sigh must have been audible throughout his whole neighborhood.

Two weeks later, David sent off a response to this latest nonsense, this time getting right down into some legal details. Apparently, whoever received David's answer had to chew on it for awhile, because it wasn't until September 23, some 113 days later, that David received his reply, which was... wait for it... a request for more time to respond.

That 30 days of additional time asked for by the agency on September 23, 2016 has now stretched to 479 (at the date of this posting, January 15, 2018). I say put a fork into it.

WE ARE NOW MORE THAN 8 years since the IRS first began troubling David with a "proposal" to assert taxable activities and a corresponding liability for 2008. We are almost 9 years since the filing of David's return establishing the contrary.

Throughout, we have seen a vigorous, sustained effort by the IRS to browbeat, confuse and intimidate David into reversing himself and authorizing the taking of his money. All without success, and without a dime leaving David's hand.

I can't think of a more vivid demonstration of the truth about the tax and about the manner by which its misapplication is accomplished when the target of the scamsters lacks a CtC education. Well done, David!



BTW, THOSE WHO READ THROUGH all the documents posted in the tale told above will have noticed David referencing his 2010 filing in one of his responses to the mounting nonsense about 2008. That little sidebar event definitely merits a few words as well, since it puts a nice accent on the proper take-away from the 2008 farce.

Happily, 2010 was a simple affair of which numerous examples can be found on the EWWBL pages and in the Victory Highlights-- a "proposed increase", quickly shut down with a simple "No". Here is the filing, which was met 16 months later, on August 13, 2012, with this:

David-- who the IRS was, remember, vigorously harassing over his 2008 filing-- shot off a simple one page response, with a "No!" indicator on the IRS form, as instructed.

Approximately 90 days later, David got his proper response and acknowledgement:

A pity the IRS didn't just face the facts as readily in regard to David's 2008 filing. Think of all the public resources that could have been saved (and all the postage that David could have saved).

And isn't it a pity that everyone hasn't done like David has, and become CtC-educated and CtC-activated?


The $0 "Deficiency"

THOUGH THIS EPISODE HAS YET TO CONCLUDE, I can't help but post it anyway, because it might be the most ludicrous and obvious IRS evasion effort yet. What we have here is a purported "Notice of Deficiency" concerning an educated filing which agrees with the filers (who will remain anonymous for the moment) that no "income" was had, and no tax is, or ever was, due. Yes, that's right, the alleged "deficiency" is $0:

This bizarre evasion attempt builds its berth in crazy-land by proposing that the positive amount claimed for refund is a "deficiency". It gets there by the unique and legally unsupported treatment of the refund claim as a "negative tax due" amount, with this offered as the explanation: "NOTE: A decrease to refundable credit results in a tax increase."

Okaaay...And how do we get to the "decrease in refundable credit"? Simple! By the equally lunatic contrivance of arbitrarily "correcting" the withheld amount to $0.00:

This fraudulent "Hail, Mary" pretense is floated despite the fact that the full amount claimed for refund is shown as having been withheld in the agency's own internal records, as well as by the sworn declarations of both the payers and the filers. This, for instance is from the IRS Account transcript:

This is from the IRS Record transcript, as of the same date (6-24-2018):

IRS W-2 records precisely match the withholding amounts reported by the filers. See, for instance, this IRS transcript (also dated 6-24-18) of what was reported by the principle earner's payer:

Match the IRS reported withholding amounts to the first Form 4852 in the return file here. Transcripts of withheld amounts for the other member of this filing couple correspond to the other three 4852 declarations just as exactly.

Plainly the IRS knows perfectly well that the withholding reported by the filers is exactly what WAS withheld, and that the amounts are attested-to by the payers involved, as well. This "notice of deficiency" bears every indication of a truly desperate attempt by the IRS to simply confuse or intimidate the good Americans whose claim the agency is trying to evade.

ALL IN ALL, this latest jink by the federal tax agency down the crooked path is a wonder to behold. Not the good kind, but a wonder nonetheless.

It is also a very emphatic underscore of the inescapable truth about the tax which this corrupt effort is meant to evade. As said in the introduction to this collection: NOT ONE of the contortions and evasions documented in this series would be attempted unless the filings and claim against which they are deployed is correct and proper under the law. It is the insurmountably correct character of these educated filings that compels the tax agencies to resort to smoke, mirrors and bluster.

But at the same time,

Watch out for that robot! I think it's going to explode!!


George and Sheila Stand Up for the Law

On April 17, 2012, CtC-educated American grown-ups George and Sheila called upon the United States to obey the law. George and Sheila called on the feds to acknowledge that while the couple had earned a fair chunk of money during 2010 and 2011, none of it was through activity in which the feds had a stake, and through which a federal claim to a portion thereof had arisen.

Further, because the feds had no skin in their game and no claim to its proceeds, the couple demanded the return of every penny that had been held back by payers and advanced to the United States during those years against the possibility that George and Sheila might have discovered, upon examining their records at the close of those years, that they HAD done taxable things upon which a tax liability HAD arisen.

George and Sheila went to pains to ensure that their claims and declarations were crystal-clear. With each of their testimonials and claims they included a cover letter explaining their filings. Here, for instance is the one that accompanied George and Sheila's 2011 1040 and rebuttal instruments:

You can see the complete filing made for 2011 here. You'll note that the claim is for the return of every penny withheld-- SS and Medicare taxes included-- a total of $3,470.00. The filing George and Sheila submitted concerning 2010 and involving two "Forms 4852", also for every penny and this time totaling $5,029.00, can be seen here.

About nine weeks later, just about the interval at the end of which most CtC-educated claimants simply get their money back, the IRS instead dropped a couple of speedbumps in front of George and Sheila. These consisted of notices alleging that no 2008 filing had been received from the couple, that the IRS was therefore proposing an assessment of its own for that year totaling more than $8,400.00, and that George and Sheila's 2010 and 2011 refunds were being held back and would be devoted to this alleged liability unless the couple proved that they didn't owe it.

Here are the notices:

(See the other four pages of this doc here.)

(The common second page to these notices can be seen here.)

OK, so let's summarize: Someone at the IRS reviewed George and Sheila's 2010 and 2011 filings and agreed that they are valid and correct. BUT, that someone is alleging that the couple didn't file a valid self-assessment for 2008, and contends that based on the agency's information the couple owe a liability for that years totaling more than $8,400.00.

George and Sheila knew better, and said so:

You'll have noted that George and Sheila indicate that the challenged 2008 filing is attached to this response. You can see that attachment here. Don't overlook the fact that this, too, is testimony of $0 "income" received, with both Form 4852 rebuttals and 1099-MISC rebuttals, and a claim for the return of all amounts withheld during 2008.

Faced with inarguable evidence that George and Sheila HAD, in fact, filed dispositive testimony for 2008, and with no valid way to overcome that testimony, but really wanting to in the worst way, the someone at the IRS took what has become the standard agency shot at evasion. He or she fired off "LTR 3176" paper missiles-- for the new filings.

These threat letters were plainly an effort to get George and Sheila to rescind their inconvenient testimony so the United States could keep their money even despite the "no return filed for 2008" nonsense having failed. Here is a sample (first page only-- see the generic 2nd and 3rd page of each of these here if interested), followed by George and Sheila's educated response (essentially duplicated in response to the 2011-related threat letter):

George and Sheila, good students of the law that they are, had plainly paid attention to posts on this subject such as those here and here. They responded appropriately:

Not quite ready to wave the white flag, the IRS agent took one final shot-- another "LTR 3176" sent right after the responses to the first one's arrived at the agency, but this time for the 2008 filing (because if that got by George and Sheila, the agent would regain the original pretext for keeping their 2010 and 2011 refunds). This was met with the same educated, point-by-point shredding of the "frivolous" allegation premise.

That was it for the IRS agent. Recognizing that he (or she) was dealing with stalwart, resolute and well-educated Americans who take the rule of law seriously and mean to see it prevail, the agent packed up his tent and moved on. The next thing George and Sheila got from the government were two checks for everything claimed for 2010 and 2011, plus interest:



Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like George and Sheila and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


An Unusually Instructive Victory In Upholding The Law

EVERY NOW AND THEN A CtC-EDUCATED VICTORY TEACHES an unexpected lesson. Brian S.'s $14K+ refund is one such victory.

Brian had earnings in 2015 from non-federally-privileged activities, from which $14,968.39 was improperly withheld by ignorant payers as nominal federal income tax, Social security tax and Medicare tax. Brian also had actual federal "income" that year-- earnings from federally-privileged activities, which had also been subjected to withholding, but properly, in this case.

Brian's educated return reflected all relevant aspects of both classes of economic activity. He reported $29,000+ in gains from the taxable activities. Against this total Brian applied his available exemptions and standard deduction and an available credit, zeroing out the potential liability attendant upon the taxable gains.

At the same time, Brian properly rebutted the erroneous payer allegations that his non-federally-privileged earnings were actually privileged and subject to the tax. Totaling all the federal income tax withholdings made in connection with the non-privileged earnings (nominal federal income tax, Social security tax and Medicare tax), Brian faithfully reported the sum in the appropriate place on his return. Continuing to follow the form's instructions, Brian ended with a claim for a refund of that total amount withheld, and on September 12, 2016 he received his claimed refund in full:

OKAY, SO FAR SO EXCELLENT, but really not unusual in any respect. However, there's a bit more to this story.

Brian's 2015 return was his first educated return. Brian hadn't found CtC until Spring of 2016. As can happen on one's first steps into the sunshine after a lifetime of being treated like a mushroom by everyone a normal, honest man or woman would reflexively expect to be honest as well, Brian had two minor stumbles while finding his footing, and one of them makes Brian's victory a particularly useful victory to explore.

You see, Brian inadvertently included with his return the W-2 copies sent to him by his non-federally-connected payers. This mistake was doubtless easy to make due to the fact that Brian DID have to attach the W-2 he had been sent by his federal-privilege-related payer.

Brian's mistake could have resulted in a rejection of his return as a nullity. This is because the return contained contradictory instruments-- W-2s alleging that he had received privilege-related earnings from two payers in regard to whom Brian also included forms 4852 rebutting those very same allegations. See Brian's return here.

But in this case the IRS employee processing Brian's return actually did the part of his job calling for quality "customer" service. About three weeks after Brian submitted his return in early July that employee sent Brian a letter asking for an explanation, focusing on the fact that even though the attached W-2s showed $112,916.91 in earnings that would qualify as "wages" if all were accurate as to the legal character of those earnings, Brian had only reported $1,666.68 in "wages" on his return:

Brian immediately realized his mistake. He promptly sent a response explaining what had been done and clarifying the substance of his return, and offering to file an amended return if necessary to straighten things out:

Five weeks later that $14,968.39 check was in Brian's mailbox.

THE LESSON HERE is clear. Brian's refund claim of everything withheld from his non-privilege-related earnings was vetted in the standard, extremely thorough fashion as have been all of the hundreds of thousands of CtC-educated refunds delivered to mailboxes across America since 2003.

But Brian's claim called for and got extra scrutiny, as well-- and then was honored in full, even though his mistake could have been legitimately used as a pretext for subjecting Brian to some grief, effort and delay before he received the refund that was owed to him. Brian's experience teaches the welcome lesson that even the IRS has decent people on its staff, who do their jobs properly despite an easy opportunity to do otherwise.

So, hats off to Brian, for upholding the rule of law to the benefit of all of us! But hats off, as well, to the anonymous IRS worker(s) who did the right thing.

But let's not get complacent. I think I still need to keep up the warning,

Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Brian and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


NOTE: I mentioned that Brian had made two mistakes on this first-time educated filing. The one not really relevant to the unusual aspects of this victory was overlooking the amount withheld from his federal pension distribution, which should have been included in the total amount withheld claimed for refund.

That amount did indeed get withheld from a taxable payment, but Brian's exemptions, deductions and credits zero out his liability, leaving him with no tax owed. Brian may find himself doing that amended return after all...


Joe H.'s Victory-In-Progress

A wonderful exposé of an agency dodge

JOE H. IS A VETERAN educated filer. Joe's $14,690.00 complete federal refund for 2014 has been posted since late spring of 2015; a year later he received a refund of what was withheld during 2015.

Unlike the refund for 2014, though, what Joe has gotten for 2015 so far is a "victory-in-progress". Here's what this means:

The United States has returned every penny of what had been withheld from Joe during 2015 under the normal "Subtitle A" tax provisions. In this case that was $7,927.00 which was withheld under the provisions of Chapter 24 of Subtitle C of the code. That type of withholding gets set aside in an escrow account and then is credited against any tax which proves to be owing at the end of the year, with the balance being refunded. (See pp. 174-175 of CtC for the statutory provisions laying out this relationship.)

The form 4852 Joe filed as part of his return/claim (see it here) shows the Chapter 24 withholding as the nominal "federal tax withheld". Here is the IRS notice announcing Joe's refund of this amount:

Here is Joe's bank statement showing the deposit:

The complete refund of this withheld amount is an agreement that Joe owed no tax for the year-- had he owed anything, this withheld amount would have been tapped to cover the liability. Indeed, the IRS explicitly acknowledges that Joe had no "income" and owed no tax, in harmony with this refund, on the second page of its notice:

So, everybody agrees that Joe had no "income". In particular (the significance of which will become clear in a moment), everyone agrees that Joe had received no "wages"-- that's the specially-labeled form of "income" under which Chapter 24 withholding takes place, and the species of "income" upon which a Subtitle A tax will be presumed to have arisen in the case of a worker like Joe. And again, everyone agrees Joe received no "income".

But despite everyone agreeing that Joe had no "income" upon which a tax liability could arise, the IRS is still trying to get away with keeping a lot of Joe's money.

AS WILL HAVE BEEN NOTICED when looking at Joe's sworn return/claim, and the 4852 included within it, Joe had a good deal more withheld than just the $7,927.00 he has received back so far. In fact, Joe's claim seeks $13,669.00-- the total of all amounts withheld from him. This total includes not just the nominal "federal income tax withheld" under provisions of Subtitle C's Chapter 24 (the withholding for deposit against the "normal tax" under Subtitle A) but also the Social security and Medicare "income" taxes, which are withheld under the provisions of Chapter 21 of Subtitle C (the withholding for the FICA "surtax" on "income").

The IRS is trying a gambit on Joe, pretending that the surtax wasn't withheld, or somehow should be excluded from the total withheld, and hoping Joe won't realize what's going on. (Or the agency hopes the boldness and incoherence of the corrupt ploy will intimidate or confuse Joe into taking his partial refund and letting the rest go).

The "explanation" given on the notice Joe received is almost comical:

The agency says "We didn't allow the amount claimed as federal income tax withheld...because... supporting documents were not attached..." And yet, not only was a supporting document attached (Joe's Form 4852); and not only had the IRS (undoubtedly) received a W-2 from the same payer whose erroneous allegations on that W-2 are being corrected by Joe's 4852; but the agency DOES acknowledge having received supporting documents, by agreeing that at least the $7,927.00 was withheld.

How otherwise did the agency arrive at $7,927.00, which happens to be exactly the amount discretely listed on Joe's supporting document and the W-2 sent to the agency by the payer as the amount of "federal tax withheld" (meaning, the amount withheld under the Chapter 24 "normal tax" deposit provisions)? Plainly the "explanation" given for excluding the Chapter 21 FICA withholdings is nothing but a pretense, and a shabby one, at that. By itself this phony explanation proves the agency has no valid ground for its behavior here.

But here's where the gambit really stumbles: By acknowledging that Joe received no "wages", the agency has agreed not only that Joe received nothing subject to the "normal tax", but also that he received nothing subject to the FICA "surtax"-- because both fall on the same thing. The "normal tax" falls on all "wages" received, and the "surtax" falls on the first $118,500 of the same "wages".

So, the United States has already admitted that Joe never actually owed any FICA surtax (just as Joe said on his form 4852 and by way of his return/claim for refund). It just wants to keep the money anyway, in defiance of the plain statutory mandate at 26 U.S.C. § 3503:

26 U.S. Code § 3503 - Erroneous payments

Any tax paid under chapter 21 or 22 by a taxpayer with respect to any period with respect to which he is not liable to tax under such chapter shall be credited against the tax, if any, imposed by such other chapter upon the taxpayer, and the balance, if any, shall be refunded.

Thus, Joe's victory is a victory-in-progress. Joe has been handed flat-out admissions in favor of the remainder of his claim, even while the United States plays it sneaky and hopes Joe will let it keep a small bucket of his blood for the slaking of its thirst.

THIS IS PRETTY OBNOXIOUS BEHAVIOR by the government. And it's a shame that Joe will still have to pursue the rest of his money.

But that said, there's an upside to all this, in a way.

This kind of game-playing by the feds illustrates and emphasizes with unusual clarity the liberating truth about the income tax. Deceptions and dodges are only resorted-to when the truth stands against you, making the government's very deliberate behavior here a particularly stark admission that the knowledge informing Joe's filing and claim is completely correct.

CONGRATULATIONS, JOE! Hats off to you, for standing up for the law and the truth.

We all owe you.


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!


P. S. Joe's victory-in-progress joins those of the tens of thousands of other awakened and activated Americans represented here. It is another step toward the restoration of the Founders republic and the true rule of law.

Don't you wish your victories were proudly posted, too?

It's easy. Stand up on behalf of the law, and then share the evidence.

That's all there is to it!


Jordan's Story

Those tasked with collecting the "ignorance tax" today are reduced to utterly embarrassing ploys...

Here is how Jordan introduced himself to me a little over two years ago:

Hello, I have a victory to report.

Throughout the 2015 tax year, I had absolutely no money withheld from me. When tax time (Spring 2016) came around, I was suckered into paying in thousands to the federal government and about a thousand to the state of Minnesota.

Right after sending the checks and seeing the money drained from my accounts, I found the Cracking the Code book. I sent in amended returns and got everything back, plus interest.

See the below images of the initial checks sent in and the refund checks.

Just want to say thanks!

Accompanying that introductory email were images of Jordan's payments to Uncle Same and the state of Minnesota that had been sent in with his original "ignorance tax" returns:

Jordan also included images of the refunds he secured two and three months later from both of these persons (with interest from both) after almost immediately replacing both "ignorance tax" filings with CtC-educated amending returns-- this one for Minnesota and this one for the feds:


Jordan even took the extra step, just after submitting his amended returns, of seeking written confirmation from the Social Security Administration of the changes he reported in his "wage" receipts. The SSA promptly obliged with the expected report.

Well done, Jordan!!


Moving to 2017, Jordan again secures a complete refund from Uncle Sam:

Only a little interest this time-- as you can see, most of this complete refund of everything withheld from Jordan during 2016 was issued April 28, 2017-- within two weeks of "tax day", with the rest following soon afterward upon Jordan correcting an error on his original return by way of a 1040X.

Another fine victory for Jordan and for the rule of law!


NOW LET'S LOOK at the fascinating story of what has happened (so far) between Jordan and Uncle Sammy concerning Jordan's claim for the refund of what was withheld from him during 2017. Things are a bit different this time.

The feds have become increasingly unhinged in scatter-shot efforts to keep their battered and clanking "ignorance tax" gravy-train limping along despite CtC having pulled up its tracks where anyone who studies the material is concerned. Jordan has been made a test case for a new and even more transparently-bogus variation on a ploy we've already seen a few times-- one which is even more revealing of what's really going on than past versions.

IN EARLY 2018 Jordan filed a now well-practiced educated return just like his others, calling for the return of everything withheld from him during the previous year. However, unlike in prior years when it simply obeyed the law, this time a sweaty-browed IRS decided it was going to try to hold on to at least some of Jordan's money.

The agency's struggle began with its issuance of a letter pretending that it had not received W-2s from Jordan's payor-- the person who had done the withholding of amounts Jordan's filing reclaims. We've seen this before many times now as a part of the victory process for recent claims. See here and here, for instance.

Incorporated within this ploy is the additional pretense that the tax agency has some legal authority under which it can disregard Jordan's own sworn statements concerning those withheld amounts, presented on his Forms 4852-- and can even do so while lacking any competing or contradicting allegations (which its first pretense asserts).

Remember, the agency has said (or definitively implied) that it doesn't have W-2s, and thus is telling Jordan by way of its notice that he must provide them to support his claims as to amount withheld. As will be seen, this pretense is a falsehood-- the agency contradicts it with another subsequent notice at which we will look in a moment.

And just for the record, the agency has no authority by which it can lawfully disregard Jordan's own testimony, regardless of what allegations by others it might or might not have. You don't have to take my word for that-- the ploy at which we are looking right now proves that all by itself.

If the agency could disregard Jordan's return and its claims, that's exactly what would happen and that's all that would happen. But it cannot, and so this little effort to browbeat, confuse and delay must be attempted.

JORDAN PROMPTLY fired off a spanking-good response to the agency's first bit of nonsense.

The agency's reply was another-- and even more bizarre-- pretense:

We've seen this one before, too. Here the tax agency, bereft of any actual grounds on which it can pretend any claim to a penny of Jordan's money as tax attempts instead to pretend that only $312.50 was withheld from him, or can be reclaimed by him, instead of the actual $4,409.96.

THERE ARE A MULTITUDE of interesting things to note in this fraudulent agency proposal. To begin with, let's look at what is said under the heading, "Changes to your 2017 tax return"-- an amusingly pretentious heading from an agency that has no authority to make any such changes.

Note that the agency's explanation for its dispute of Jordan's withheld amount declaration is based on the supporting document (W-2) which it earlier had pretended to not have. Note, too, that the $312.50 that is proposed is, in fact precisely the amount reported on that W-2 as the amount withheld under Chapter 24 of the IRC, as declared by Jordan on his Form 4852. So the agency has here admitted that it's earlier claim of lacking supporting documentation for Jordan's withheld amounts was a lie.

NEXT, LOOK CLOSELY at the agency's declarations in the "Your tax calculations" and "Your payments and credits" fields. In both the "Your calculations" and "IRS calculations" columns, we find plain, honest agreement that Jordan had only the $161.00 of tax-relevant income that he reported on his return (in the form of interest from a national bank).

Looking at the, "Your Payments and credits" field, on the other hand, we see the equally plain lie about the total amount withheld. Under "Income tax withheld, line 64", the IRS lists only the $312.50 withheld from Jordan under the provisions of Chapter 24 of the IRC. Everything past that is declared to be $0.00s (including the "Other credits, lines 66a, 67-73" field, a fact which will become significant in a bit).

In its false assertion of the Chapter 24 withholding of $312.50 as the total amount withheld, the IRS has simply omitted the far larger amounts withheld under the provisions of Chapter 21 in connection with the income surtaxes for Social security and Medicare. The agency just wants to keep this money, and hopes to do so by pretending that it was never withheld (or by hoping that its omission will be mistaken by Jordan as being done in harmony with some valid legal authority, and will be left undisturbed).

BE CLEAR ABOUT THIS: the agency is not actually asserting some right to keep this money, which, of course, it hasn't got. Indeed, the agency has admitted it has no such right, when admitting that Jordan had no tax-relevant "income" and is entitled to the return of all his Chapter 24 withholding.

Both Chapter 21 and Chapter 24 impose withholding on the same events/receipts. (See this brief if interested in the relevant legal structure.) Being entitled to the return of the one means being entitled to the return of the others (and the IRS knows this full well, as it has definitively shown by having made upwards of 250,000 such complete refunds over the last 15 years...).

Rather, the agency is simply pretending that the Chapter 21 amounts were not withheld, or pretending that it can lawfully withhold them from refund even though the events upon which authority to withhold and retain those amounts is predicated never happened.

In short, the IRS assertion of only $312.50 being overpaid and liable for refund is an out-and-out falsehood, and nothing more than that. It is grounded in no legal doctrine, and is in simple defiance of the undisputed facts.

This IRS ploy is what I've come to label a "victory-in-progress", in which some money has been returned, and all the requisite admissions to establish the filer's undisputable claim to the rest have been made. The agency bad apple responsible is simply and obnoxiously leaving it to the aggrieved claimant to take further steps to be made whole, while counting on the likelihood of some to forego the effort, to Uncle Sam's benefit.

HAPPILY, JORDAN DOESN'T FALL into the "confused, intimidated or mistaken" category. His response to the "bad apple" at the IRS was immediate and uncompromising, and even included yet another document supporting his declared and reclaimed total amount withheld.

It seems that it was the IRS that found itself confused and intimidated at this point. The next thing Jordan received from the agency was a request for his patience for a few months while the agency figured out how to deal with this unwelcome pushback.

Finally, exactly 60 days after asking for 60 days (a new record for the agency, which usually exceeds its predictions of this sort by a wide margin), the IRS dropped the unique new load it had taken two months to incubate as its desperate answer to Jordan's indisputable claim and debunk of the agency's previous lies and gibberish. Referencing the date it received Jordan's response to the CP12 proposal as the "Date claims received" and the amount claimed as Jordan's total withholding less the $312.50 it had proposed, the agency offered this explanation for sticking to its pretenses (for the moment) by way of a LTR916C dated August 21, 2018:

"We can't process your claim for the tax periods listed above. To claim excess social security tax, you must have reported wages from more than one employer and the social security tax withheld must exceed the maximum amount required for the tax year." !!

Now, did anyone see anything whereby Jordan claimed "excess social security tax"? Here is Jordan's 1040 "Payments" field:

Look at line 71, "Excess social security tax (and tier 1 RRTA tax) withheld". See anything in that field? Remember the IRS's own CP12 report that we looked at above, which itself acknowledges $0.00 for "Other credits, lines 66a, 67-73"?

The agency resort here, after a couple of months to struggle with its conundrum, is JUST MORE INCREASINGLY TRANSPARENT BULLSHIT.

So, WELL DONE, Jordan, and don't stop now (I know you won't...).


Watch out for that robot! I think it's going to explode!!


Sorry, Charlie, But No, We DON'T Owe That Tax...

Another educated American couple send the tax-robot reeling away

SCOTT AND DEBBIE GILLESPIE are a couple of real Americans standing tall for the rule of law and for their rights. Last week they won their second victory on behalf of both, turning an IRS effort to tax earnings from work the Gillespies had said were not taxable into a, "Thank you for your response to the notice we sent to you about your 2013 taxes. We're pleased to tell you that the information you provided resolved the tax issue in question and that our inquiry is now closed."

Here's the story: In 2014, Scott and Debbie filed this return concerning 2013. As is seen, Debbie did not dispute the characterization of her earnings during that year as "wages" (and a W-2, not included in this posting, was attached to the return accordingly). But as is also seen, Scott DID rebut allegations from HIS payer that his activities as a contractor (and the earnings that resulted) were taxable.

The IRS didn't like that rebuttal, and very much preferred Scott's payer's allegation. In October of 2015, the agency sent Scott and Debbie a "proposed tax due" notice, reciting the payer's numbers and calculating an unpaid tax liability for the Gillespies of $2,010:

But Scott and Debbie know the law, and were neither intimidated, nor misled by this agency effort to get them to reverse themselves and declare that what Scott does for a living is taxable when they know it is not. Scott fired back this letter in response to the "proposal", making all of this perfectly clear.

A couple of long months went by, during which who knows what was going on in the bowels of the bureaucracy. But finally, on January 19, 2016, the IRS acknowledged the correctness of Scott and Debbie's position:

HATS OFF TO SCOTT AND DEBBIE GILLESPIE, who stand tall for the truth and the law!

Don't you wish everyone knew what Scott and Debbie know about tax law, and stood up the way these good folks do? (Scott and Debbie also have a lawsuit going to compel the return of amounts withheld from them in Think of what that would do to restore the American republic and the real rule of law!

Seriously. Think about it.

But while you do,

Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!


William and Caroline Wadsworth March Tall and Straight-- Right Over The Robot

William and Caroline Wadsworth filed a CtC-educated return concerning 2011 acknowledging some "income" and rebutting a half-dozen individual erroneous allegations by payers that other of their receipts also qualified as "income". Over a year later the IRS decided to try to chivvy them back into the "ignorance barn" with the livestock:

But these two American heroes refuse to be cowed by domestic enemies of the law. They stood their ground and were rewarded for their perseverance with this crisp and clear acknowledgment of the truth about the tax as revealed in CtC:

I'll let them tell their own tale, since they did so as clearly as could be. Links to the documents involved will follow.

Here's the letter William and Caroline sent me with their victory documents:

Here's the letter they shared with their legal assistant, which summarizes the issue, what they did about it, and the outcome:

Now, see William and Caroline's 2011 filing here.

See the IRS CP16 diversion notice here.

See the IRS CP2000 effort to treat their perfectly common unqualified earnings as "income" and subject to the tax here.

See William and Caroline's educated response to this effort here.

You've seen the IRS CP2005 acknowledging the truth, and surrendering the fight, above; see the Wadsworth's transcripts here.



Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like William and Caroline and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax?  You can help change that, and thereby help transform America.  Click here to learn how.


Tony Jackson has sent the robot away reeling

On April 15, 2011, Tony filed his return concerning 2010, showing no "fed-come", and no tax due, while simultaneously rebutting assertions to the contrary made by those who paid him money that year:

On July 16, 2012, the ever-hopeful IRS took a shot at chivvying Tony back into the barn and the role of pliant livestock, resignedly serving as a fuel-source for their Leviathan client:

Inconveniently for the agency's preferences, Tony wasn't having any, and responded like a grown-up American committed to the rule of law and the Founders' intentions that their heirs should be free and in charge:

A scant few weeks later, the IRS, recognizing that it was dealing with someone who knows his rights and the law, and takes both seriously, abandoned the corrupt ploy, and went off looking for softer victims:

TONY FOLLOWED UP HIS STORY ABOVE with this report in Spring, 2015:

Hello Pete,

I have decided to try to compile my story with documentation for you to post. I think it's boring but I wanted to share it. You do of course have posted my initial CtC filing for 2010 filed on 4/15/11, the CP2000 7/16/12 and response letter 8/13/12, and last but not least the CP2005 9/4/12 stating I owed nothing and that the case is closed.

I sat on my laurels for the next couple years thinking they might leave me alone even though I had a number of years left to be filed. In Aug 2013 they sent a 688-W to my place of work seeking back taxes for the year 2002 which was now 11 years old and filed the wrong way. I had prepared for this some years ago after reading CtC as I knew this would be the last battlefront I would find myself on that they could truly hurt me on, but I was hoping it would not come to this. I was wrong.

I went through my files and your site and found the section “A Sorry, But Instructive, Little Subterfuge” and since I was not going to work for nothing I had nothing to lose by challenging my place of work on this. I constructed a letter from the information you provided there and added a thing or two that I thought should be included since I was throwing this at a totally green reader.

Most importantly I copied and pasted from the IRC the entire section 'SECTION 6331. Levy and Distraint. (a) Authority of Secretary'...As to leave it in no uncertain terms that this was not my opinion but a direct read of the code conveniently provided for my work or his lawyers to investigate on their own.

I thought I was out of a job. Much to my surprise the owner sent the affidavit I provided to the IRS. I'm sure more to cover his rear, not mine, but as it turned out, the matter simply vanished. Imagine that? He has recently commended me on my fortitude in defying them and expressed his pride in me.

As soon as I saw I was still in the IRS's sights I decided to file all remaining years I was sitting on which at the time was 2007, 2008, 2009, 2011, 2012. I did so all at once on 8/29/13. I did not want to think they would start giving me trouble with 5 years so I was a bit nervous.

On 10/7/13 I received a CP24 which stated I was due a refund of 200.00 for the year 2007, but I would not be getting it because the statute of limitations had been exceeded. I did not know what they were talking about at first until I recalled making an estimated payment for 2007 on the advice of the accountant I had do 03-06 for me. I had not asked for this, but it told me one thing....they had processed all 5 years I had just submitted as I had stated and since 2007 was the only year that had any discrepancy in math that was all I heard about. I now had 6 years of taxes successfully filed as CtC returns! This time there would be no challenge of my knowledge, as I had shot down the 1099 in my 2010 return, I had shot down the challenge of the CP2000, I had shot down the challenge of a 668-W (the true feather in my cap here).

Even after I fought off an attempt at work to steal my pay for taxes owed for 2002 they tried to get me at home for 2002 with more junk mail. I decided it was time to cut this off at the source. On 12/26/13 I filed an amended return (1040X) for 2002 and eliminated any testimony they could use to harass me further. I have heard nothing since. I shot that down too!

I've since filed 2013 and 2014 with no incident. It is fast, easy and free. Except for the certified mail I use to force feed it to them. I use a witness and a certificate of service on each return to seal the deal. That makes 9 solid years of CtC filings.

I have also helped a couple others understand their rights and assisted them in their own CtC filings. So far one has heard nothing and is preparing to file 2 more years he is sitting on. The other received the CP2000 in Feb and I assisted him in responding to that. I wanted to show to you or whoever might be interested, that they have changed the form to be much less obvious than it was in 2013. I have provided images to demonstrate.

You and your family have restored my faith in America and have shown me that standing up for ones rights is a simple as learning what they are.

Here is Tony's 2017 video.



Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Tony and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


W. H. has set the robot's head spinning

On August 20, 2010, W. filed four educated claims for the return of everything deposited with the federal government by his company during 2008 as amounts withheld from workers previously mistaken to be "employees" as the term is meant in "income tax" law, accompanied by the following explanation (in relevant part):

Starting in July of 2011, W.'s company started receiving its refunds, with appropriate interest:

You'll notice there's no check with this last notice-- one got mailed, but was damaged in transit. W. promptly sent off for a replacement.


Either while all these other checks were properly issuing, and perhaps for that reason or perhaps having taken notice of W.'s request for a replacement for the damaged check, someone in our favorite bureaucracy decided to explain to W. that... well, actually decided not to explain anything, because there isn't anything legitimate to say except "Have a nice day." Instead this someone decided to try to browbeat W. back into "ignorance tax" servitude with a threatening "frivolous" notice of just the kind discussed here:

Being a well-educated student of CtC and serious grown-up American who knows that left to do so without people like him laying down the law and then standing solidly on its behalf, people in these rogue bureaucracies will always do the wrong thing, W. stood up tall, and laid it down firmly:

Of course, the IRS stuck to THEIR sincerely-held, well-grounded, legally-correct position, right? Well... no. A month and a half later, what arrived in H & M's mailbox was not another threat, but just this:



Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like W. and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


There ARE Honest, Law-Respecting Federal Judges!!

CtC WARRIOR NATHAN ANDERSON introduces us to one of these good souls-- Judge Dale S. Fischer of the United States District Court for the Central District of California. On October 10, 2012 and then again on November 6, Judge Fischer stood up and stood out from the pack. Breaking a long and darkly-tarnished record of precedents by her colleagues on the bench, Judge Fischer firmly quashed a bogus IRS summons aimed at Nathan, and then denied a subsequent government Motion for Reconsideration.

The summons had demanded bank records in an apparent fishing expedition intended to secure evidence of receipts which would have been gratuitously used as a pretext for asserting that Nathan had received "income". Nathan would then have been put to the trouble of rebutting baseless allegations of corresponding tax liabilities.

Judge Fischer's rulings are significant because these summonses have previously been routinely upheld by federal judges, who all-too-often are mere enablers of IRS and DOJ bad behavior. In a departure from that corrupt norm, Judge Fischer recognized that her responsibility is to the law, rather than to the state.

The rulings are ALSO significant, and much more so, because in and by her rulings, Judge Fischer recognizes that intrusive efforts like the one attempted by the government against Nathan must be in pursuit of a lawful purpose-- not to discover if a valid basis for such intrusions exists. That is, intrusive, privacy-violating efforts like this can only be permitted in pursuit of an end for which a legitimate basis has already been established.

The purpose alleged here was the collection of tax liabilities. Absent proof that such liabilities had been previously established and assessed, the effort to submit someone's records to invasion and scrutiny is illegitimate and unenforceable.

Here, the IRS was attempting to harass a CtC-educated American who had established that no liability existed. Thus, there could be no lawful purpose to the summons, and thus, despite being specifically challenged to do so by the judge, the agency was unable to produce any evidence of assessed liability. The best the DOJ and its IRS client could do was the revealingly desperate argument that since the agency isn't allowed to pursue collections activities in the absence of an assessment, and WAS pursuing such activities, the judge should just take it for granted that there must be an assessment somewhere...

FINALLY, THE RULINGS IN THIS CASE are ESPECIALLY significant because among the alleged (but ultimately non-existent) "assessments" cited as the basis for the summons was one for 2004:

Nathan, a good and long-time CtC warrior, had filed an educated return and claim for complete refund of everything withheld in 2004, which refund he duly received-- seven years before. (Nathan has also received a complete refund for 2002 on an amended return filed after this 2004 victory, and he and his wife have received other subsequent state and federal victories.) Anyone who has been harassed with bogus IRS threat notices about "changed accounts" and other nonsense, or who has been been wearied with ever-more absurd warnings from anyone to the effect that, "All these refunds are just slipping through the cracks. Eventually they'll get noticed and "taken care of"!" will find this plain evidence of the emptiness of such nonsense of great interest.

Way to go, Nathan!

And our hats are off to Judge Fischer, as well, who is clearly a public servant worthy of her high office, and who understands what Dr. King meant here:

"Cowardice asks the question - is it safe? Expediency asks the question - is it politic? Vanity asks the question - is it popular?

But conscience asks the question - is it right? And there comes a time when one must take a position that is neither safe, nor politic, nor popular; but one must take it because it is right."

-Dr. Martin Luther King, Jr.


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Nathan and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


Ellen Brooks has a great story to share

On April 14, 2010, Ellen filed an educated claim for the return of all property improperly withheld from her as nominal "federal income tax" during 2009 (while declining to claim the return of what was also withheld from the same payments as "Social Security" and "Medicare" income surtaxes, for reasons of her own). Click here to see Ellen's claim.

Rather than just quietly obey the law, as it usually does, on June 7, 2010, the IRS took a shot at persuading Ellen to abandon her dignity and her responsibility as a grown-up American by sending her a scary "frivolous return" notice, threatening her with harm if she didn't rescind her testimony and swear to something more suited to the tax agency's interests:

Ellen wasn't having it, but didn't even need to say anything about it. The junk-yard dog apparently realized this wasn't going to fly all on its own (despite the false reference on the form below to "...your inquiry of June 07, 2010."), and just five weeks after getting the threat, Ellen got what only CtC-educated Americans ever get: a complete back-down, with apology:

Despite the courteous words, like crocodile tears, the sincerity of such expressions are rightly suspect (especially considering the questionable provenance of the signature below them...). But in this case, the proof of the pudding is in the eating, and it was served right up not even a month later:


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Ellen and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


S. Y. Schools Missouri

On May 19, 2016, Missouri was pursuing proposed tax liabilities against S. Y. The liabilities were related to alleged taxable real estate sales transactions in 2006 totaling $135,500.00, which had been reported to the state DOR by the IRS:

The MDOR had calculated taxes, penalties and interest due of more than $10K in 2009 and had filed a lien for that amount in 2010:

Having recently found CtC (and the Missouri CtC Warriors), however, S. found that she was no longer a deer caught in the headlights, as are so many Americans unfortunate enough to not yet know the truth about the tax. Quite the contrary; S. was a veritable ninja warrior for the rule of law.

Mindful of the fact that there is no obligation to confine oneself to tax-agency-issued forms, as long as the right information and declarations are made, as explained here, S. crafted a combined Missouri return and educated multi-faceted rebuttal instrument and fired it off to the MDOR.

Just four weeks later, S. was writing this email:

"I just checked my PO Box a lil while ago. And I had these awaiting me!!!! Am so happy< I thought before reading the information in CtC and joining this awesome group I would have to hire a very good CPA/Attorney to get them off my back. However, Praise God, I found CtC. Thank You!!!"

Here's what showed up in S.'s mailbox:

WELL STRUCK, S.! The rule of law is more secure today and the People have regained a bit of their power, thanks to you!!


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like S. and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


Dave Nelson's Excellent Adventure

This episode of EWWBL starts out with a nice, complete refund of everything withheld from warrior David Nelson during 2005 against the possibility that he might prove to be liable for "income" taxes in connection with that year once he has filed his declaration of relevant taxable activities:

More than a year after this May, 2006 victory, some IRS law-defier decided to take a shot at herding David back into the barn. In September of 2007, David got this scary-paper in the mail:

(Note the remarkable coincidence of the amount of "increase in tax because of this change" and the amount of David's refund...)

David wasn't cowed by this tax-agency effort to evade the law. As he wrote to me after receiving this attempt to confuse and intimidate him: "I will not get back down on all fours for this agency!" And he certainly did not.

Instead, David got on the phone and rattled the cage of his assigned IRS flack for a while. The flack did his best to pretend to misunderstand David, but...

Eight months later, David gets THIS in his mailbox:

Now David is down to a $10,593.00 "tax increase", with $26,298.00 due...

David disagrees, and said so. He responded to this nonsense with the following:

David L. Nelson




May 9, 2008

Certified Mail #70073020000199971928


Internal Revenue Service

4800 Buford Hwy

Attn: D Kidd

Chamblee, GA 39901-0021


Re: Reply to LTR CP2000 May 05, 2008


To Dennis Kidd and the Internal Revenue Service:.


On the face of the Form 1040 return and Form 4852 I have enclosed and previously filed with the Internal Revenue Service for TY 2005, I accurately accounted for all receipts under the excise laws of the United States. I do not agree to any changes to my returns.

In the Explanation section of your letter you indicate information reported to IRS differs from that amount shown on my return. It also says that . “IF this information is correct, your tax increase is $10,593 plus applicable penalties….” The difference in Taxable Wages was corrected on the Form 4852 which was included with my Form 1040. My private non-federal non-taxable receipts were incorrectly identified as “wages” ( as defined in 26 USC Sec 3401 (a)(c) and 3121 and others) by my private sector company.

The difference in Tax Withheld of $8027 is the sum of Social Security and Medicare income taxes withheld. If you look on my Form 4852 you will see the following amounts:

7(i) Social security tax withheld 5580.00

7(j) Medicare tax withheld         2446.87

This rounds the total to           $8027

Section 6201 Part D of the Internal Revenue Code is reprinted below for your convenience:

Sec. 6201- Assessment authority

(d) Required reasonable verification of information returns

In any court proceeding, if a taxpayer asserts a reasonable dispute with respect to any item of income reported on an information return filed with the Secretary under subpart B or C of part III of subchapter A of chapter 61 by a third party and the taxpayer has fully cooperated with the Secretary (including providing, within a reasonable period of time, access to and inspection of all witnesses, information, and documents within the control of the taxpayer as reasonably requested by the Secretary), The Secretary shall have the burden of producing reasonable and probative information concerning such deficiency in addition to such information return.


Additionally, in accordance with 26 USC 6203 and CFR 26 Sec 301.6203-1, please provide me with the record of assessment signed by the assessment officer, authorized by the Secretary, whom recorded  these liabilities for TY 2005.


Unless the IRS has factual knowledge of my private finances superior than my own and can prove as such per Sec 6201and 6203, please provide that information so I can respond. If you don’t have personnel knowledge of the facts I will assume this matter closed.



David L. Nelson


Notice CP 2000 May 5, 2008

TY 2005 Form 1040 and Form 4852

The law-defiers took a little time figuring out their next move, and then struck back with an impressive display of confidence, and the presentation of overwhelming legal support for their claims:

...followed by this:

Now we've got a $21,786.00 "DECREASE in tax" (and interest), and what amounts to a plea to David to return the FICA "contributions" which were long since properly refunded to him. This request is made despite the fact EVERYONE once again agrees David had received none of the "wages" by which liability for such "contributions" is measured! (If David HAD received such "wages", he would have been liable for the normal tax on those "wages", AS WELL as the FICA surtax on the first $75,000.00, or whatever the threshold was in 2005, which the "service" is trying to cajole him into presenting to it as a gift.)

Hang in there, Dave! In another six months of this pattern, the IRS is going to start sending you notices claiming IT owes YOU...

Part II

With an exasperated (but amused) "I don't know how many more letters I can get from the different campuses all on the same subject...", Dave sent me the following "letter 2645C" that arrived in his mailbox the day the first part of this EWWBL episode was posted:

Hey, there are only 122,000 workers at that 146-year-old agency. We can hardly expect them to have gotten organized this quickly...

Part III

David shot off a cogent and articulate response to the last "We changed your account" nonsense from the 'service', which apparently gave them something to chew on during the 45-day time-out requested:

August 20, 2008

TY 2005 CP21A

David L. Nelson



Internal Revenue Service

Atlanta, GA 39901-0010



To Whom It May Concern:


I received an unsigned CP21A notice dated August 11, 2008 in which you state “We Changed your Account.


I filed timely Forms 1040 and 4852 with the Internal Revenue Service for TY 2005 in which I accurately accounted for all receipts under the excise laws of the United States of America. I do not and did not agree to any changes to my lawfully prepared and sworn return.


You do not have the authority to change my sworn testimony. Your letter alleged that I have incurred a revenue taxable liability but does not provide any facts or evidence of that liability. Your belief that I incurred this liability seems to have arisen out of an unconstitutional policy of acting under color of Amendment XVI to misapply the taxes codified in Title 26 as direct taxes on the income of a private sector individual, in violation of the Article I, sec 9, cl.4 express prohibition against direct taxation without apportionment according to representation, and in knowing disregard for the decision of the U.S. Supreme Court in Brushaber. If you have facts and evidence that I am incorrect in my assessment please provide me with those facts so I can respond.


If you do have authority to change my sworn testimony I can only guess the amount has been reduced because you agreed with me that I did not have “wages” as defined. What is the $9984.99 predicated on? I can only surmise that it is the FICA “contributions” which were long since properly refunded to me and that you agree I received none of the “wages” as defined by which liability for such contributions is measured.


I request and demand you correct your records to accurately reflect that I did not incur a revenue taxable liability for an excise tax for TY 2005.




David L. Nelson

Finally, the 'service' got the message:

Way to go, Dave!


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Dave and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.

Sometimes even the bad guys have to speak clearly...

Late in 2004, after many years of searching for the truth about the "income" tax (and traveling a ways down some dead-ends in the process), K. W. (who wishes to remain anonymous for the moment due to ongoing legal issues related to those "dead ends") found CtC. Shortly thereafter, in February of 2005, K. filed six belated, educated returns seeking to rectify past bad practices (and one timely return for 2004). Here is an example of these filings:

(This particular year's filing included 11 rebuttals of 1099s like the sample above.)

Unfortunately, most of these filings were made after opportunities to contest allegations of "deficiencies" for the years involved had already been foregone, and the 'service' went on with collections procedures already in train for calculated liabilities in connection with years where "notices of deficiency" had been issued and ignored.

However, just adding insult to injury, an eager-beaver at the tax agency handling K.'s case, who doubtless hadn't a clue as to the sea-change in K.'s knowledge and actions and probably wouldn't recognize an accurate, lawful filing in any event, decided to try piling-on and asserted that K.'s. CtC-educated filings were "frivolous" (per 26 USC 6702). K.'s responses to these ignorant assertions were disregarded, and the agency loose-cannon (who's probably now in trouble for having done so) proceeded to really put his foot in it by making a "determination" in favor of the penalties and issuing a "Notice of Federal Tax Lien" alleging a government interest in K.'s property for the penalties that would have applied if the "frivolous" assertion were actually true:

K. didn't sit still for this. He promptly petitioned Tax Court for some supervision over its errant agency:

He got it:


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like K. and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


J. has made quick work...

...of a bogus IRS effort to chivvy him back into the eyes-down, cud-chewing, barn-bound herd. In October of 2007, J. had filed his CtC-educated return for 2006, rebutting a couple of erroneous ascriptions of "income" to him by folks who had paid him during the year, and making his formal declaration of "income" received for the year-- which happened to be $0. See the filing here.

Not quite a year later, the tax agency decided to deliver a little "customer service". It popped the following into the mail to J.:

Needless to say, Warrior J., who takes his responsibilities as an American as seriously as our Founders did, wasn't interested in being an IRS "customer", and didn't see any of this as "service", at least not the kind of "service" he was going to tolerate:

The IRS, which is now verrrry familiar with this kind of response, and understands that those who send it aren't backing down and aren't going to be fooled again, quickly folded its tent and went to look for a non-CtC-educated person to bother instead:

One can only hope that those non-CtC-educated folks out there will wake up and start helping good patriots like J. get the out-of-control, law defying federal government back into harness where it belongs. If they don't, we're just going to have to watch in sorrow while the harness is tightened on these folks instead, and the whip-cracking begins in earnest...

Meanwhile, WAY TO GO, J.,


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like J. and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how (while you still can-- see below...).


Nathan and Lynda's Enforcement of the Law

A COUPLE OF YEARS AGO, NATHAN AND LYNDA COOLEY learned the truth about the 16th Amendment and the truth about the "income" tax. As all those who know these liberating truths are compelled to do, Nathan and Lynda promptly rose to uphold the law, reclaim control over their property and impose much-needed discipline on the state, just as intended by the Founders when they established the rules to which federal taxes are subject.

Nathan and Lynda filed several educated returns for past years-- some well past what would have been the "due dates" had any taxes been owed. Most of these late filings are still making their way through the thickets of resistance to which tardiness in the face of existing "income" allegations by payers can open the door, but one, for 2008, has just completed its gauntlet to the point of reluctant acknowledgment by the tax agency, making it a fit episode for this series.

In 2010 and 2011, Nathan and Lynda filed these two returns for 2008-- an original 1040 and then an amending return rectifying a few mistakes on the original in declaring amounts withheld and how the refunds were claimed.

In July of 2012, the Empire struck back:

Nathan and Lynda wasted no time in responding with a stern but measured notice that they are neither fools nor children; they know the law; and they take their rights and their civic responsibilities to keep the state in line and uphold the rule of law seriously.

THE EVIL EMPIRE WASN'T YET READY to stand down however. It responded in late August with a "Notice of Deficiency" alleging a $23K+ outstanding balance for Nathan and Lynda for this period (containing all the usual impressive-looking "examination" reports and calculations, all of which hinge-- without ever saying so-- entirely on the presumption that whatever the folks who prepared "information returns" said concerning the target of the notice is true, and the pretense that the target hasn't rebutted those "information return allegations):

At about the same time ('cause these folks tend to pre-date stuff) another, and rather enhanced, "frivolous" threat notice arrived:

Nathan and Lynda promptly responded again, unambiguously sticking to their guns and giving no ground.

THE EMPIRE SAT BACK ON ITS HAUNCHES for a bit, until February of 2013. At this point, having recognized that they were playing a losing hand with the scare tactics, the bad guys tried a different approach to the problem of these hard-case citizens who were refusing their assigned role as coppertops in the ignorance-tax matrix. This time all those elaborate fiction-based calculations in the five-month-old "notice of deficiency" were tossed, and a whole new, much-reduced "Amount due" was run up the flagpole to see if Nathan and Lynda would finally salute like good little frightened feedstock:

Nope. Nathan and Lynda aren't interested in negotiating with a mugger about what part of what doesn't belong to him at all would be OK for him to take. They responded accordingly.

FINALLY THE MESSAGE HAS GOTTEN THROUGH, and reality, however inconvenient to the empire's ambitions, is taking hold:

This is not quite over, of course-- the empire is still hoping to get away with keeping amounts withheld from Nathan and Lynda as "FICA" taxes even though it has now admitted that they had no "wages" by which such taxes are measured... This is annoying, of course, but at the same time the cheap little last-ditch effort at resistance is highly revealing of the true nature of all such resistance-- entirely groundless shots in the dark in the hope of snaffling a little something for Uncle Sammy's treasure chamber by pure brass and the expectation that getting completely whole won't be worth the victim's effort.

So, Nathan and Lynda have a little hassle left in front of them here.

But in the meantime,

Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!


Isn't it too bad everyone hasn't done like Nathan and Lynda and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.


Erik and Cathie's Saga

In 2007, I was pleased to post federal and California victories concerning 2005 by Warriors Erik Segelstrom and Cathie Hamer. At the time, I noted that there was apparently a bit of cognitive dissonance in the mind of the IRS in regard to Erik and Cathie's claim for the return of their property. Even while properly honoring that claim, the 'service' simultaneously asserted-- without, it is virtually certain, legal assessment-- that the claim was "frivolous"; and presumed to withhold a portion of Erik and Cathie's property (which was unfortunately already in the agency's hands, of course).

Thus, the $9,648.00 belonging to Erik and Cathie which had been being held by the federal government in escrow against the possibility of normal and "Social Security" and "Medicare "income" taxes proving to be due from them for 2005 was dinged for $500 before the balance was returned. What's more, even after this little outrage, the IRS sent a "levy notice" to Erik and Cathie months later claiming the $500 was still due from them.

The insignificance of "notices" such as the one received by Erik and Cathie-- even those not ludicrously issuing belatedly as in this case-- has been discussed in depth elsewhere on this site, as has the rare but thoroughly childish and obnoxious "penalty deduction" from property otherwise properly returned. No more needs to be said about that here-- what follows is just more of the same. It's simply a whole lot of more of the same.


The first thing that happened after Erik and Cathie filed their claim was the arrival of a "LTR 3176C":

Erik and Cathie hammered out an immediate response, essentially reading the 'service' the riot act and demanding that it cease its ridiculous and criminal efforts to evade the law. They also began a series of frustrating phone calls to IRS staffers, which continued off and on for the next ten months. Later in the summer, they filed an FOIA seeking any documentation of a liability for 2005, which was received by the 'service' on September 21, 2006. The response they got was a "LTR 3175C":

...and then eventually another, for good measure:

Then came an assertion that Erik and Cathie's (allegedly frivolous) return couldn't actually be found!

(The reference to "the inquiry of Dec. 25" is a mystery...)

Erik and Cathie wearily sent another copy of their return, to which the 'service' responded with:

Then came this:

...and this:

...and then, this:

...and, at long last, this:

Now, earlier in April, before the check had arrived, Erik and Cathie had already sent yet another scathing letter demanding that the service get its act together, and either substantiate that this alleged "penalty" had actually been legally assessed or drop its "frivolous" nonsense.  This showed up, in completely unresponsive response:

...followed by this:

...and this:

Obviously, these later notices are simply even more blatantly empty eyewash than the earlier ones, but they have served the useful function of keeping Erik and Cathie from forgetting that the federal government is still holding $500 of their property to which it has no legitimate claim. Toward the end of last year, after another round of interminable phone conversations with a variety of mystified IRS personnel, Erik and Cathie sent another notice and demand for evidence of the lawful assessment of this penalty or the return of their property.

To date, after nearly two years in which to justify or substantiate all of this baloney, the 'service' has offered:

"   ".

...but after Erik and Cathie's November, 2007 demand it did send this:

...and then, after another chain-yank, this alternative version of the same nonsense...

The stall has proven to be endless, but "Bravo!" to Erik and Cathie for their steadfast perseverance and their nearly complete legal victory, and overwhelming moral and illustrative victory. To the IRS for its performance in this little comic opera: Nothing but raspberries...


Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Erik and Cathie and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax?

Erik wants to tell you this himself

You can help change that, and thereby help transform America. Click here to learn how.


Mark Lovely's Federal Adventure Concerning 2010

In 2011, Mark made claim to the return of everything withheld from him during 2010 and diverted to federal hands as pre-payments of "income taxes-- including all Social Security and Medicare taxes. Here is Mark's rebuttal of allegations that the roughly $50,000 he had earned as a mechanic that year involved the exercise of any federal privilege, and claim to the return of everything withheld from him.

The first reaction of the IRS is to ask Mark for more information to support his claim. See that March 22, 2011 IRS inquiry by Donna M. Stevenson here.

Mark promptly replies with a letter affirming the veracity of his $0 "income", $9K+ withheld, send-it-all-home return.

In response, a month later (and just about exactly a year after Mark received his complete federal refund for 2009) the IRS returns everything Mark claims in his filing (albeit by crediting it to old alleged outstanding balances owed to the government-- Mark had been a bit of a tax protestor before finding CtC...).

So, an educated claim is made, unmistakable in its character. It is specifically noted by live IRS personnel, who challenge it, who receive and consider its re-affirmation, and who then respond by processing and honoring the claim. You've just seen it with your own eyes-- but it gets better.

More than a year later, someone at the IRS-- who might be tasked with trying to shore up the "read our lips" ignorance-tax scam that had been working so well for generations before CtC came along-- decided to take a shot at chivvying Mark back into the copper-top livestock barn. On June 25, 2012 (14 days after receiving his complete refund for 2011), Mark received a "Notice CP2000" proposing changes to his tax for 2010.

The IRS "proposal" was based on a specific assertion that contrary to what he had reported on his return, everything Mark had earned in 2010 was subject to the tax, and that he owed nearly $6,000 in taxes on those earnings. The proposal asserted that Mark owed back what had been returned to him as FICA withholdings, and also accuracy-related penalties and interest totaling almost $2,500, for a total allegedly owed of more than $12,000. Here is the "proposal", with Mark's prompt "No way, Jose!" response included.

A bit more than a month after Mark's detailed response to the IRS "proposal" (and just about exactly 3 years after Mark received his complete refund for 2008), he received a "Thank you for your correspondence-- we need time to figure out what to do..." reply. The service said it would get back to Mark within 60 days telling him "what action we are taking."

Well, it was actually more like 280+ days before the flummoxed push-'em-back-into-the-ignorant-and-subservient-barn specialist figured out his next move... which proved to be, more bluster. This time, nearly a year later on May 22, 2013 (and just a few weeks before receiving his federal refund for 1999, which is not yet posted), Mark received a petulant notice declaring that unless he rescinds the inconvenient return the IRS had said was all wrong and bad and which it now declares it has determined to be "frivolous", and replaces it with one more to the government's liking within 30 days, he will be assessed a $5,000 penalty.

Here is the "frivolous" notice Mark received, and his immediate response (which he in part just wrote right on the copy of the notice he included in his reply, having gotten thoroughly tired of the bs and no longer having the patience for courtesies). The IRS promptly acknowledged receipt of Mark's reply, and told him that someone was still researching his case and would contact him by July 26, 2013 to let him know "what action we're taking."

Like last time, JK... Before we get to where this all has gotten to to date, let's review:

  • Mark Lovely files his rebuttals and claim on February 11, 2011.

  • On March 22, 2011, Donna Stevenson of the IRS asks Mark to verify things on his return, which Mark does on March 26.

  • On April 25, 2011, the IRS issues Mark's complete refund in light of its close study of his return and the competing W-2s issued by those who paid him-- which Mark had, by the way, clearly acknowledged in his response to Ms. Stevenson's challenge to be in disagreement with his filing.

  • More than a year later, Mark receives a "proposed change to his tax", claiming a total of $12,144 balance owed for 2010, including a $5,888 tax on Mark's earnings (which Mark is invited to agree are "wages" as defined in tax law and would therefore qualify as "income" subject to the tax), a claim that $3,807 of what was credited to him shouldn't have been (FICA tax amounts which apply when "wages" have been received) and $2,449 in penalties and interest.

  • After another year, Mark receives notice that unless he rescinds his filing by June 22, 2013 (which he does not), he will be assessed an additional $5,000 "frivolous return" penalty.

  • All told, we have an alleged outstanding amount of $17,144 plus the interest that would have been accumulating on all of this over the years-- were any bit of it legit.

  • Throughout the entire period the IRS issues several lame "We'll get back to you shortly..." notices, and two other of Mark's so far five complete federal refunds.

This takes us up to March 10, 2014, when Mark gets... A "notice of tax due" form alleging a total amount due for 2010 of $3,807.46 in alleged tax, plus $365.40 in interest.

Gone is the $5,000 "frivolous" nonsense. Gone is the $5,888 "normal tax" alleged in the June 2012 "proposed tax due". Gone is the $2,449 in penalties and interest also alleged in the same "proposal".

Gone is everything but what is purported to be the amount Mark claimed and received as an overpayment of "FICA taxes" and a little bit of allegedly-related interest. However, even that purported FICA-related amount is inaccurate, and revealingly so.

The $3,807.46 is not, in fact, a legitimate figure off ANY actual withholding report. Instead, it is exactly the amount arrived at when Mark's claimed refund of $9,656.46 on his return is reduced by what the IRS "proposed" on page 7 of its June 25, 2012 "proposed change in tax" (CP2000) to be Mark's "legitimate" withholding credit of $5,849.

Note that Mark does not "round", but adds up all the pennies. On the other hand, the IRS does NOT round in its "proposal", and changed the actual amount withheld from Mark (exclusive of FICA-denominated amounts) from $5,849.97 down to just $5,849. Clearly, someone wanting to keep the pretense of resistance to Mark's filing alive just grabbed that two-year-old "proposal" figure and subtracted it from the figure on Mark's return to come up with what was imagined to be his FICA withholding, in order to populate this field for supposed "add'l tax" beyond the $0 shown on Mark's return.

This is not the first time the agency has agreed that $0 of the "wages" by which FICA taxes are measured were received but someone there still tried to corruptly assert a claim to withheld FICA amounts. See this filing, and the subsequent refund here and here flatly acknowledging $0 "wages" but trying to keep the FICA withholding anyway, for instance; or this instance of the same gambit from nine years ago, or this one.

Due to this hoary and hokey last-ditch effort, Mark's little story here still isn't quite over, I'm afraid. He will have to continue to explain reality to whatever rogue agent is responsible for this harassment. But...

Watch out for that robot!  I THINK IT'S GOING TO EXPLODE!!

Isn't it too bad everyone hasn't done like Mark and read CtC-- the exclusive source of the complete, accurate and liberating truth about the "income" tax? You can help change that, and thereby help transform America. Click here to learn how.

Every Which Way But Loose II

Every Which Way But Loose III

Also, see the Victories Highlights page (an early version of this collection) for additional specially-notable CtC-educated victories. To enjoy well over 1,000 examples of the hundreds of thousands of straightforward "just-the-check-and-no-hassles" victories enjoyed by the CtC-educated for years now, click here.

Are You Ready For More Power?



"Peter Hendrickson has done it again!  'Upholding The Law' does for individual liberties what 'Cracking the Code' did for tax law compliance: exposes the reader to the unalienable truth!"

-Jesse Herron, Bill Of Rights Press, Fort Collins, Colorado




from Pete Hendrickson,

the man who Cracked the Code of the United States "income" tax;


became the first American in history to recover EVERYTHING withheld from him, Social Security and Medicare "contributions" included;


and has ever since been the target of unrelenting assaults by a government willing to do just about anything to thwart the spread of the truth!!


In this new volume, you'll learn about:


  • The in-depth, real story behind the Sixteenth Amendment;

  • A simple little model of just how the "income" tax works;

  • Cognitive stumbling blocks exploited by tax agencies against liberation-seeking Americans;

  • The disturbing relationship between the "income" tax and the Federal Reserve;

  • Why tax reform ideas like the "Fair Tax" are not only unnecessary, but completely counter-productive and even dangerous;

  • Why the "income" tax is what it is, and has to be;

  • The truth about common myths and misunderstandings within the "tax honesty" movement;

  • How to think clearly about the tax, the law in general, and the voracious state;


  • A sordid little passport application scam revealed;

  • How to know if you're in denial about the current crisis in America;

  • Whether the Constitution is going to save you, or is it the other way around?

  • The truth about paper "money; government schools; the Second Amendment...

...and much, much more!


Is this website of any value to you? If so, please consider a donation to help keep it available.

Donations can be sent to:

Pete Hendrickson

232 Oriole St.

Commerce Twp., MI  48382