A Conspiracy That Isn't, And The Conspiracy That Is

Dispelling a paralyzing phantasm with a clarifying dose of state-supplied reality

LET ME START OUT BY SAYING THAT I'M QUITE RELUCTANT TO EVEN SPEAK of the "conspiracy that isn't" which prompts this article: the crazy notion that a regime has been secretly imposed upon us all by reason of which Americans interact with their government institutions and in their economic affairs in the guise of "corporate entities" and/or "trustees". It is embarrassing to even admit knowing of notions like these.

Those who promote and embrace such notions should understand that doing so inflicts a fatal wound to their intellectual credibility in any circle but that of fellow believers-- and that means any circle in which competent research and rational analysis is valued, as well as any circle of what might be described as the "mainstream" of American perspectives.

I speak of this now, despite my reluctance, because I have recently been reminded of the astonishingly large number of good folks who, though courageous and committed liberty-and-rule-of-law-loving activists by nature, are nonetheless effectively sidelined from making real contributions to the cause by this bizarre idea. Misled, these good folks tilt at windmills day in and day out while leaving the real threat to their well-being unconfronted, like the bull that wastes all its energy charging the distracting red cape while the matador steadily draws its blood.

It is beyond me why anyone would ever imagine that (s)he is, or is treated as, or can only be treated as, a corporation (or a "trustee") by the government or by others wanting to engage with that person economically. What is it that would cause someone to imagine that (s)he is invisible, or untouchable, or incapable of acting in his or her own natural capacity as a human being when dealing with other human beings and institutions created by, composed of, and existing for the purposes of, human beings?

Isn't simply articulating these notions enough to show their wrongness? Let me articulate further.

 This alleged conspiracy, like all those "cabalistic" notions of the same sort, is argued not to be a simple matter of multiple interested parties each being happy to encourage and exploit ignorance of what the law plainly says to anyone who knows where to find it. Instead, it is a complex and proactive conspiracy involving the complete capture and transformation of all legal relationships and practices, and in a fashion that would strike anyone affected as bizarre, inexplicable and completely pointless, even for the purposes of the supposed conspirators.

More, this proposed conspiracy would have to include pretty much everyone except the guy telling about it and the guy being told. It would have had to include everyone over the course of decades, if not hundreds of years (various versions of this lunacy date the beginning of this bizarre "corporate persona imposition" to 1933, 1873, and even 1789).

This "conspiracy" rests on the invariable and entirely unspoken institutional embrace of definitions and principles expressed nowhere in any law of the United States, but which we are expected to just assume to be in force. The "conspiracy", we are asked to believe, somehow plays out in such a way that no one has ever been able to present for inspection a single documented instance of it being overcome or even just flatly exposed. Not a single declaration on a single document produced by the officials supposedly implementing the thing day-in and day-out over all the years can be produced in which can be seen,

 "John Doe is found to be a corporation and therefore..." or,

"Charges against Jane Roe, who has sworn to the court that she is not, in fact a corporation, and whose attestation meets with no contrary evidence, are dropped..." or,

"Mike Moe swears he is not a corporation, but of course, he really is, and so..." or

"...but of course, Jill has a Social Security number and is, therefore a [corporation, employee, trustee, whatever]..."

-- or anything of the sort. Not one.

Nor is there so much as a single law-school text, or lecture excerpt teaching a word of this notion, nor any thing else whatsoever supporting this ridiculous "theory".

In short, this "theory" is simply nonsense, and serves only to distract good Americans from what is REALLY going on-- a soft, unstructured conspiracy of corrupt individuals with which the American institutional landscape has become littered, each operating independently of the others but sharing a common disdain for the law and a willingness to borrow from each others' crimes in the furtherance of their own exploitive purposes.

SO, LET'S TAKE A LOOK AT THE REAL CONSPIRACY.

The common feature to the varied implementations of this, the real conspiracy against American liberty and the rule of law, is a lack of any underpinning in actual authority, pretended or not. Instead, the real conspirators faced by upstanding Americans are 100% reliant on the ignorance, timidity or distraction into ineffectiveness by nonsense like the "we're all corporations theory" of its targeted victim, and on the laziness or disengagement of the legal community and the media.

Consequently, unlike simply being the last human in a sea of pod-people, with no meaningful recourse against a massive "secret law" conspiracy, accurately-educated American patriots ARE, in fact, ready and able to take action and restore the republic. Also unlike the vague conspiracy-theories that rely entirely on the naiveté of the mark for "proof" of their existence, the real conspiracy plaguing America is readily-documented and displayed.

I'm going to walk everyone through one example of that concrete, documenting evidence of the real conspiracy plaguing America. In this case, we examine a recent and so-far-unresolved effort by the Minnesota Department of Revenue to evade an educated American couples' claim for a complete refund of amounts withheld as "income" tax.

I want everyone to recognize that, just as is true of each and every one of the 1,000+ examples of much more common CtC-related documentation on display here, and the hundreds of thousands of the same calculated here, and the dozens of defeated resistance efforts on display here and here, this one simply would not exist were CtC-- and only CtC-- not completely true, correct and complete, and were the conspiracy anything more elaborate than I describe it to be.

By recognizing this truth about what is really going on, you will also recognize that you are not the helpless victim of an overwhelming organized foe. Instead, you are Alice assailed by the pack of cards, needing only to take off the virtual-reality headset that was put on you when you were asleep, and do the same for your family, friends and acquaintances.

TO A DEGREE UNUSUAL AMONG THE STATES, Minnesota has been occasionally balky in response to educated claims seeking the return of property withheld and escrowed against possible tax liabilities. This past summer a couple of good Americans making their first-ever claim with the state were subjected to this graceless behavior, and while their having to go through this is a shame, and though the matter is not yet concluded and corrected, the evasion effort by the state Department of Revenue is instructive and illuminating.

Brief background: on August 21, 2014, some 4 1/2 months after the filing of their claim, and two months or so after their federal claim for 2013 was honored in full, the Minnesota Department of Revenue (MDOR) sent these good folks a "Notice of Change in Minnesota Individual Income Tax or Property Tax Refund". The MDOR proposed a tax outcome for 2013 quite different from what the claimants had calculated for themselves. The purported basis and authority for this will be presented and discussed below.

Our claimants replied to the notice with a [unfortunately argumentative] letter that was treated by the MDOR as an appeal to the substance of the "notice". The MDOR responded a bit over a month later with a "Notice of Determination on Appeal" (which you can see here). This is what we're going to examine in detail below, by an exact reproduction of that notice (in blue text) and my comments added [in brackets] where appropriate.

What will be revealed in this exercise is evasion and mendacity, and a clever effort to get around the limitations plainly laid on the state by the actual law on its own books in a brazen attempt to confuse, intimidate and exploit ignorance of the state's legal structure. That is, the nature of this attempt, and the legal restrictions it is intended to evade and overcome, will make clear to all observers the true character of the real conspiracy upon which today's American patriots must focus their attention.

(Other than in its gratuitous and self-serving deployment of terms such as "wages" and "employer" "income" and so forth, the "facts" summary of the MDOR appears accurate enough as I understand the sequence of events, so I will let it fill in any blanks remaining from that standpoint.)

[This is a beautiful start for the MDOR, setting the precise tone for all that follows: this declaration is entirely irrelevant to this case since, as we will see in a moment, the "determination" authority itself only provides for recomputation of the tax, not a change in the gross amount involved in that computation.]

[However, because of the limits on the "determination" authority in regard to a filed return, all this amounts to is a presumed correctness and burden regarding any claimed deductions and the mathematics with which the rate of tax is applied to "net income".]

[Like the previous one, this entire paragraph is irrelevant to this contest. All "net income" is subject to the tax, but "net income" for purposes of 290.014 is "federal taxable income" (290.01, subd. 19), which is gross income less available deductions. The MDOR's authority is to only to adjust "the taxpayer's computation of federal taxable income"-- that is, to adjust the application of available deductions to gross income or the math, as provided for in M.S. 289A.35:

289A.35 ASSESSMENTS ON RETURNS. The commissioner may audit and adjust the taxpayer's computation of federal taxable income, items of federal tax preferences, or federal credit amounts to make them conform with the provisions of chapter 290 or section 298.01 [a mining tax]. If a return has been filed, the commissioner shall enter the liability reported on the return and may make any audit or investigation that is considered necessary.

This "adjustment authority" does not extend to changes in the amount of gross income being used in those computations, as is made clear not only by the confinement to audit and adjustment of "the taxpayer's computation" in the authorizing statute above, but also in the very explicit language in the following portions of M.S. 289A.38:

Subd. 7. Federal tax changes.

If the amount of income, items of tax preference, deductions, or credits for any year of a taxpayer ... as reported to the Internal Revenue Service is changed or corrected by the commissioner of Internal Revenue or other officer of the United States or other competent authority ... the taxpayer shall report the change or correction or renegotiation results in writing to the commissioner ... within 180 days after the final determination and must be in the form of ... an amended Minnesota ... income tax return conceding the accuracy of the federal determination or a letter detailing how the federal determination is incorrect or does not change the Minnesota tax. An amended Minnesota income tax return must be accompanied by an amended property tax refund return, if necessary. A taxpayer filing an amended federal tax return must also file a copy of the amended return with the commissioner of revenue within 180 days after filing the amended return.

Subd. 8. Failure to report change or correction of federal return.

If a taxpayer fails to make a report as required by subdivision 7, the commissioner may recompute the tax, including a refund, based on information available to the commissioner. The tax may be recomputed within six years after the report should have been filed, notwithstanding any period of limitations to the contrary.

In short, the MDOR has no power to unilaterally "adjust" the amount of "income" from which is derived the "federal taxable income" ("net income") that is the starting point for a Minnesota return (and can't even do adjustments according to what it might at some point have reason to imagine some federal authority has done until at least 180 days after the federal authorities actions are finalized). And that's all that is relevant here. Lacking authority to declare the receipt of "income" contrary to what appears on the return, everything going on here is pure eyewash and reliance on the ignorance or fear of the target. But let's go through the rest anyway, and get everything possible out of this exercise.]

[This entire paragraph is also irrelevant for the same reason as the last one, but while we're here: On the contrary--or more precisely, if you prefer-- IRC §7701(c) actually provides that "includes" is a term of LIMITED enlargement, allowing for the inclusion of unenumerated things which are within the meaning of the statutory term being defined by the shared special characteristics of the enumerated exemplars. Thus, the fact that the common word "employee" generally includes private citizens, as you say, is irrelevant to the scope of the uncommon, statutorily-defined term "employee" at 3401(c). In any event, and again, all of this is irrelevant. The MDOR lacks authority to "adjust" the amount of "income" being used in tax computations, however much it may be willing to pretend misunderstanding of the meaning of "includes".]

[Actually, all the IRS "notices" listed here are eight years old and were explicitly superceded by the official IRS "Frivolous Position" list mandated by statute just after the dates of every one of these notices (as explained in the "Background" section of this document). See each succeeding version of these lists here. CtC-educated "positions" are not on any of these official lists, a fact very tellingly illustrated by the "Position #AR" hoax exposed here. These references by the MDOR are bogus, just like its citations to irrelevant statutes and its effort to evade by omission the very plain and strictly-limiting provisions of M.S. 289A.35 and .38.

The court rulings cited in this paragraph would require several pages-worth of text in properly parsing out every misconstruction, irrelevancy and falsehood in which the MDOR would likely be hoping to find support for its assertion that the return in this case qualifies for a "frivolous" penalty (something we'll see and address again a little further down). But it is enough to simply point out that in none of them was the issue of MDOR's inability to adjust "gross income" raised or ruled upon; and that lacking authority to find a receipt of "income" contrary to what appears on the claimants' return, whether of "wages" or otherwise, the department plainly has no grounds for alleging a flaw in a return based on what the filers do or do not declare in that regard.*]

[Another effort to skate past the sole relevant issue here: MDOR's lack of authority to "adjust" the gross amount of "income". Whether it is "well established that under both Federal and Minnesota law, wages are taxable" is of no significance in this whatever. True or not, and even if it were established that these claimants HAD, in fact, received "taxable wages", the MDOR lacks the authority to add them to the gross income figure on the return.

At the same time, the appeals officer's careful phrasing has to be appreciated. Note the precise statement that "wages are taxable", despite the earlier efforts to suggest-- while carefully never saying so-- that all earnings are taxable. This is followed by the careful use of the phrase "compensation in wages" rather than just "compensation" or "earnings". Contrast the careful wording in this paragraph with what it would have been if what the appeals officer strove to suggest earlier were valid:

"It is well established that under both Federal and Minnesota law, all earnings are taxable. For those reasons, the Department properly included your compensation from XXXX and XXXXXXXXXX in your income."]

[Actually, Busch concerns only the MDOR's authority over the effect of deductions in computing federal taxable income, as discussed above-- in this case the MDOR disallowed a deduction for gambling losses which the IRS had allowed. Although I have been unable to find the text of the ruling in Bond, based on extensive citations to the case in other rulings it appears to  provide only that Minnesota courts consider matters already adjudicated in Tax Court de novo.