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.

All-in-all I think we can say that Ruben has stuck in his thumb and pulled out a plum, leaving the junk-yard dog to gnaw on coal this year. Each outcome couldn't have happened to a more deserving party.

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:

...this:

...this:

...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)

...this:

...this:

...this:

...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!

But, WATCH OUT FOR THAT ROBOT!! I THINK IT'S GOING TO EXPLODE!!

***

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!!

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.

But...

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...).

But,

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!!