posted December 02, 2013 10:06 PM            

- including 'Income', 'Person', 'Taxpayer', 'Shall', and 'Must'
Deciphering the Internal Revenue Code and IRS Publications

- by Mitch Modeleski

The Internal Revenue Code (IRC) is a masterpiece of deception designed to mislead Citizens into believing that individuals are subject to federal income tax. The Code was written by attorneys for the Internal Revenue Service (IRS), and contains a series of directory statutes using the word "shall", with provisions that are requirements for corporations, but not for individuals. Even members of Congress are generally unaware of the deceptive legal meanings of certain terms that are consistently used in the IRC. These terms have legal definitions for use in the IRC that are very different from the general understanding of the meaning of the words.

Lack of knowledge of these legal definitions causes misunderstanding by uninformed Citizens who are confused as to the correct interpretation of both the IRC and the true meaning of the tricky wording in IRS instructional publications and news articles. However, when you understand the legal definitions of these terms, the deception is easily recognized and the limited application of the Code becomes clear. This understanding will help you to see that filing income tax forms and paying income taxes must be voluntary acts for most Americans because the United States Constitution forbids the federal government to impose any tax directly upon individuals.

'INCOME'

Most people mistakenly believe all moneys they receive, such as wages, salaries, and tips, are "income". However, for years, IRS publication #525, entitled "Taxable and Nontaxable Income", has acknowledged that wages and salaries are NOT "income". Publication #525 states: "Wages and salaries are the main SOURCE of income for most people." In the court decision of Graves vs People of the State of New York ex rel O'Keefe, 59 S.Ct. 595 (1939), the United States Supreme Court ruled that a source of income is not income, and the source is not subject to income tax. In that decision, the Court stated: "A tax on income is not economically or legally a tax on its source." However, wages, salaries, commissions, and tips (sources) are considered to be "income" for an individual when he lists them as "income" on an IRS tax return form. When he signs the tax form under penalty of perjury, he has made a voluntary oath that his wages, salary, commissions, and tips listed on the return are "income" and that he is subject to the tax.

In the still standing decision of Brushaber vs Union Pacific Railroad Company, 240 U.S. 1, the United States Supreme Court ruled that the federal income tax is an excise tax under the Sixteenth Amendment (the income tax amendment). The Court explained that THE INCOME TAX CANNOT BE IMPOSED AS A DIRECT TAX (A TAX ON INDIVIDUALS OR ON PROPERTY) because the United States Constitution still requires that all direct taxes must be apportioned among the States. "Apportioned" means that a direct tax is laid upon the State governments in proportion to each State's population. The Court ruled that income tax can be constitutional only as an indirect (excise) tax -- that is, a tax on profits earned by corporations or privileges granted by government. In other words, said the Supreme Court, in order for there to be "income", there MUST be profits or gains received in the exercise of a privilege granted by government. As an example, a lawyer is granted the government privilege of being an officer of the government court when he represents clients in litigation.

At law, labor is property. In fact, the Supreme Court has identified labor as man's most precious property. Therefore, the exchange of one's labor for wages or salary (which are also property) is considered by law to be an exchange of properties of equal value in which there is NO gain or profit. Such a property exchange of equal value cannot be taxed because there is no profit or gain. Also, one who works in an ordinary occupation is not a recipient of any privilege granted by government, because he is merely exercising his constitutionally guaranteed right to work and earn a living. Courts have repeatedly ruled that no tax may be placed upon the exercise of rights. Their reasoning was sensible. If the exercise of rights could be taxed, government could destroy them by excessive rates of taxation.

Items that the law includes in "income" are described in Code sections listed under the title of "Items Specifically Included in Gross Income", which covers Sections 71 through 86. Nowhere in these sections and nowhere else in the Code is there any mention of wages, salaries, commissions, or tips as being "income". For example, to deceive and intimidate waitresses into declaring their tips to be income is a double fraud. First, tips are gifts, not wages. According to the IRC, gifts are not subject to income tax. In fact, even if tips were considered to be wages, they would still not be "income" and would not be subject to an income (excise) tax unless one enters them as "income" on a tax return form.

'PERSON'

People generally consider the term "person" to mean an individual only. But, IRC Section 7701, entitled "Definitions", includes a corporation, a trust, an estate, a partnership, an association, or company as being a "person". All of these legal entities are "persons" at law, so it is legally correct but very misleading when the federal income (excise) tax on corporations is described by the deceptive title of "Personal Income Tax". This misleading description leads most people to believe that it means a tax on individuals.

The legal term "person" has an even more restricted definition when used in IRC Chapter 75, which contains all the criminal penalties in the Code. In Section 7343 of that Chapter, a "person" subject to criminal penalties is defined as:

"... [A]n officer or employee of a corporation, or a member
or employee of a partnership, who, as such officer,
employee or member, is under a duty to perform the act in
respect of which the violation occurs."
An individual who is not in such a capacity is not defined as a "person" subject to criminal penalties. Unprivileged individuals, who do not impose the income (excise) tax upon themselves by filing returns, are not subject to the tax and they are not "persons" who can lawfully be subjected to criminal charges for not filing a return or not paying income tax.

Sections of the Code relating to the requirements for filing returns, keeping records, and disclosing information state that those sections apply to "every person liable" or "any person made liable". These descriptions mean "any person who is liable for the tax". They do not state or mean that all persons are liable. The only persons liable are those "persons" (legal entities such as corporations) who owe an income (excise) tax, and are therefore subject to the requirements of the IRC. If you substitute the word "corporation" for the term "person" (a corporation is a person at law) when reading the Code or other articles and publications relating to income tax, the true meaning of the Code becomes more apparent.

A TAX PAYER IS NOT A 'TAXPAYER'

The deceptive term "taxpayer" is a legal term created by combining the words "tax" and "payer". The general understanding of the term's meaning is different from its legal definition in the IRC. Section 7701(a)(14) gives the legal definition of the term "taxpayer" in relation to income tax. It states: "The term 'taxpayer' means any person subject to any internal revenue tax." (All internal revenue taxes are excise taxes.) Note that the section does not say that all persons are "taxpayers" subject to internal revenue tax. Corporations are "taxpayers", for they are "persons" subject to an internal revenue (excise) tax.

The term "taxpayer" is used extensively throughout the IRC, in IRS publications, news articles, and instructional literature as a verbal trap to make uninformed Citizens believe that all individuals are subject to federal income tax and to the requirements of the IRC. These materials state that "taxpayers" are required to file returns, keep records, supply information, etc. Such statements are technically correct, because "taxpayers" are those legal "persons" previously described that are subject to an excise tax, but unprivileged individuals are not "taxpayers" within the meaning of the IRC.

The confusion about the meaning of the term leads most people to mistakenly assume that they are "taxpayers" because they pay other taxes such as sales taxes and real estate taxes. Those people are tax payers, not "taxpayers" as defined in the IRC. When they read articles and publications related to income tax, describing the legal requirements for "taxpayers", they erroneously believe that the term applies to them as individuals. It is very important to understand that the IRC requirements apply to IRC-defined "taxpayers" only, and not to unprivileged individuals. Corporations and other government-privileged legal entities are "taxpayers under the Internal Revenue Code"; unprivileged individuals are not, unless they voluntarily file income tax returns showing they owe taxes, thus legally placing themselves in the classification of "taxpayers". Because of its legal definition, the term "taxpayer" should never be used in relation to income tax, except to describe those legal entities subject to a federal excise tax.

'SHALL' means 'MAY'

In general use, the word "shall" is a word of command with a mandatory meaning. In the IRC, "shall" is a directory word that has a mandatory meaning when applied to corporations. The IRC contains a series of directory statutes using the word "shall" in describing the actions called for in those sections of the law. The provisions of these directory statutes are requirements for corporations, because corporations are created by government and, consequently, are subject to government direction and control. Since corporations are granted the privilege to exist and operate by government-issued charters, they do not have the constitutionally guaranteed rights of individuals. This government-granted privilege legally obligates corporations to make a "return" of profits and gains earned in the exercise of their privileged operations when directed to do so by law. This is why the tax form is called a "return".

However, directory words in the Code merely imply that individuals are required to perform certain acts, but directory words are not requirements for individuals when a mandatory interpretation of the directory words would conflict with the constitutionally guaranteed rights of individuals. Courts have repeatedly ruled that in statutes, when a mandatory meaning of the word "shall" would create a constitutional conflict, "shall" must be defined as meaning "may". The following are quotes from a few of these decisions. In the decision of Cairo & Fulton R.R. Co. vs Hecht, 95 U.S. 170, the U.S. Supreme Court stated:

"As against the government the word "shall" when used in
statutes, is to be construed as "may," unless a contrary
intention is manifest."
In the decision of George Williams College vs Village of Williams Bay, 7 N.W.2d 891, the Supreme Court of Wisconsin stated:

""Shall" in a statute may be construed to mean "may" in
order to avoid constitutional doubt."
In the decision of Gow vs Consolidated Coppermines Corp., 165 Atlantic 136, the court stated:

"If necessary to avoid unconstitutionality of a statute,
"shall" will be deemed equivalent to "may" ...."
Sections 6001 and 6011 of the IRC are cited in the Privacy Act notice in the IRS 1040 instruction booklet in order to lead individuals to believe they are required to perform services for tax collectors. Note the use of the word "shall" in the following sections of the Code:

Section 6001 states:

"Every person liable for any tax imposed by this title, or
for the collection thereof, shall keep such records, render
such statements, make such returns, and comply with such
rules and requirements as the Secretary may from time to
time prescribe."
Section 6011 states:

When required by regulations prescribed by the
Secretary any person made liable for any tax imposed by
this title, or for the collection thereof, shall make a return
or statement according to the forms and regulations
prescribed by the Secretary."
Note that Sections 6001 and 6011 apply to "every person liable" and "any person made liable", but not to "individuals". However, THERE IS NO SECTION IN THE IRC THAT MAKES INDIVIDUALS LIABLE FOR PAYMENT OF INCOME TAX because any law imposing a federal tax on individuals would be unconstitutional, for it would violate the taxing limitations in the U.S. Constitution which prohibit direct taxation of individuals by the federal government. People are often confused when reading the Code because, under Subtitle A, Chapter 1, which covers income taxes, Part 1 of Subchapter A has the misleading title of "Tax on Individuals". The title is misleading because Part 1 imposes the tax on "income", but contains no requirement for individuals to pay it. But an individual becomes a "person liable" for the tax when he files an income tax form, thereby swearing that he is liable for (owes) the tax.

The Privacy Act notice in the instruction booklet for IRS Form 1040 also shows that disclosure of information by individuals is not required. The notice states:

"Our legal right to ask for information is Internal Revenue
Code sections 6001 and 6011 and their regulations."
The IRS does not say that those sections require individuals to submit the information; those sections only give the IRS the authority to ask for it.

Section 6012 states:

"Returns with respect to income taxes under Subtitle A
shall be made by the following: (1)(A) Every individual
having for the taxable year gross which equals or exceeds
the exemption amount ...."
Subsections (2) through (6) list corporations, estates, trusts, partnerships, and certain political organizations as also being subject to this section.

Any requirements compelling unprivileged individuals to keep records, make returns and statements, or to involuntarily perform any other services for tax collectors, would be violations of constitutionally guaranteed rights.

The Thirteenth Amendment to the United States Constitution forbids compelling individuals to perform services involuntarily. The Amendment states:

"Neither slavery nor involuntary servitude, except as
punishment for crimes whereof the party shall have been
duly convicted, shall exist within the United States, or any
place subject to their jurisdiction."
The Fourth Amendment in the Bill of Rights of the United States Constitution states that the people's right to privacy of their papers shall not be violated by government. To compel individuals to disclose information taken from their papers would violate this right.

The Fifth Amendment in the Bill of Rights protects the right of individuals not to be required to be witnesses against themselves. To compel individuals to disclose information by submitting statements or information on a tax return form, all of which could be used against them in criminal prosecutions, would violate their Fifth Amendment right.

These examples show some constitutional conflicts that would result from defining the word "shall" as meaning "is required to". Thus, "shall" in the above mentioned statutes must be interpreted as meaning "may". Consequently, for individuals, keeping records, making statements, and making returns are clearly voluntary actions that are not required by law.

'HAVING' INCOME

According to the wording of Section 6012 previously discussed, it is a directory statute which pertains to the filing of income tax returns, and applies only to those individuals "having income". Since the word "having" has no deceptive legal definition in the Code, its legal meaning is the same as its customary meaning in general use. Although dictionaries define the word "have" as meaning "possess" or "hold in one's possession", the IRS fraudulently misinterprets "having income" as meaning "receiving gross receipts" when applying Section 6012 to individuals.

To better understand the meaning of "having income", consider this example: If during one year a corporation receives ten million dollars (gross receipts) from the sales of its products, and has expense items of nine million dollars, the corporation has a profit (income) of one million dollars. When tax liabilities are determined at the end of the year, the corporation has (possesses) an increase in its assets (a gain) of one million dollars. But, if the corporation's expenses equaled its gross receipts, it would then have (possess) no profit or gain (income) and it would owe no income tax.

Now, consider another example: If during one year an individual receives fifteen thousand dollars in wages (gross receipts) from the sale of his labor, and has expenses of fifteen thousand dollars to sustain himself and his family, he then has (possesses) no increase in assets. Although he has (possesses) nothing more than he had at the beginning of the year, IRS agents consider him as "having income" of fifteen thousand dollars. IRS agents ignore the fact that his wages were not income according to their own publications!

'MUST' means 'MAY'

Most people have never studied the IRC and their understanding of the law is generally based on hearsay, newspaper articles and IRS instructional materials. These instructions make frequent use of the deceptive word "must" in describing the things that the IRS wants you to do, because "must" is a forceful word that people mistakenly believe to mean "are required". Very few people realize that "must" is a directory word similar to "shall" and that, in IRS instructions to the public, it means "may", the same as the word "shall".

In the legal definition of the word "must" in Black's Law Dictionary, it states:

"... [I]t is often used in a merely directory sense, and
consequently is a synonym for the word "may" not only in
the permissive sense of that word, but also in the
mandatory sense which it sometimes has."
Because of the constitutional conflicts explained earlier in this article, the word "must", similar to the word "shall", cannot have a mandatory meaning for individuals. It therefore means "may" when used in IRS instruction publications.

The IRS instructions for Form 1040 state that you "must" file a return if you have certain amounts of income. IRS withholding instructions state that employers "must" withhold money from paychecks for income tax, "must" withhold social security tax (an income tax also), and "must" send to the IRS any W-4 withholding statement claiming exemption from withholding, if the wages are expected to usually exceed $200 per week. An understanding of the legal meaning of the word "must" exposes the deception by the IRS and makes it clear that the actions called for are voluntary actions for individuals that are not required by law. If these actions were required by law, the instructions would not use the word "must", but would say that the actions were "required".

FREE SOVEREIGN CITIZENS

Prior to the American Revolution, the American colonists were subjects of the English Kings and were subject to their orders and edicts. But, according to the Declaration of Independence and the United States Constitution, the Citizens of our country are free sovereign individuals. They are not subjects of government, nor are they subject to mandatory direction or control by the federal government. Except for duties such as military draft and jury duty, the federal government has no authority to require unprivileged individuals to perform services for government.

There is no section in the IRC requiring individuals to pay income tax or file income tax returns, because the federal government has no constitutional authority to impose any tax directly upon individuals or to require them involuntarily to keep records, make statements, make returns, or perform any acts for the convenience of federal tax collectors. But, if an individual files a return, his voluntary action of signing the form, thereby swearing under penalty of perjury that he owes the tax, is an acknowledgment under oath that he is subject to the tax (a "taxpayer") and is therefore subject to the directory statutes of the IRC.

posted December 02, 2013 11:58 PM            

Off the top of my head the Constitution says Congress has the right to levy taxes pretty much as it deems necessary. Is this not so? Where does it say wages etc cannot be taxed?

Not arguing but trying to clarify here...? Apologies if I've missed something but try reading all this on a tiny screen... ;(

But as I understand it the generic deduction is what makes the rest of your earnings "income" (or itemized deductions if you are your own source of income) everything over and above is income as you are using it here, the deductions what you need to live on. And people prove every year that low as it is the basic deduction is enough to Survive on if not "live" much!

posted December 03, 2013 02:01 AM            

quote:

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Originally posted by jwhop:
How disappointing to find out the IRS thinks I'm not a "person".

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posted December 03, 2013 07:04 PM            

quote:

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You never fail to fall on the side of the establishment, AG. You always believe what you are told.

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This cop-out is getting old. It's not a matter of siding with the establishment. It's a matter of siding with the law, which is what we're debating as well as what you're going to school for.

quote:

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I doubt you would ever watch any video to the contrary, because you have already made up your mind (which is not an open mind, btw).

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It's true that I didn't watch your videos, but it's also true that I haven't had much time (which you'd know if you'd have accepted my Facebook fried request some time back). I will say, however, that I've rarely come across videos that are well sourced, particularly when they're trying to make a subjective point. Video, in itself, isn't compelling. I'll go check them out right now to humor you. And don't talk to me about having a mind that's already made up when you're showing no less yourself. It would be one thing if you were demonstrating without a shred of a doubt that you're right/correct here, but it's altogether a different story when you're completely unable to make such a case.

First video:
Did you look at the comments? Are ANY of the people in the video discussing the supposed absence of law citing legal cases? No, they're not. I'm just supposed to roll over, and accept the testimony of people with opinions who did not even try to cite a rationale for their opinions?

Second video:
This one's an hour long. Probably won't sit through all of this. Joe Bannister is already fairly discredited having been the adviser to criminally-charged and convicted tax cheats. Just as he lost his CPA's license, you may put your legal practice in jeopardy following this line of thinking. "Freedom Law School" isn't a law school. You can read about the guy who started it in this article on tax deniers: Hell Nay, We Won't Pay - New York Times

Joe Bannister seems like a nice enough fellow. I've watched long enough to find out that he's a Pisces (February 25th). If we were to astrologically profile people on their sun signs, I don't think Pisces would top the list of most practical or pragmatic. Pisces can be given to conspiracy theories as well, right, as well as playing the victim to someone's villain? There seems to be a bit of both going on with Joe. I agree with your assessment that he seems both credible and honest. His legal record just doesn't show that he got things right.

quote:

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Banister won his case against the federal government in 2005. Their attempt to railroad him was an epic fail.

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Bannister's client went to jail. It's apparently hard to convict promoters [of illegal tax schemes]. Bannister gets his CPA license revoked later for promoting such illegal returns (i.e. being a poor CPA), and he was unable to recover his license on appeal.

quote:

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AG, your lack of understanding regarding the Fifth Amendment and what it means to be a witness against oneself just confirms how you parrot things you have no true comprehension of.

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You keep claiming that I'm the one lacking comprehension all the while espousing the ideas of people that fundamentally don't understand the law, who lose to the law on legal grounds.

quote:

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Now run off to the IRS website and copy and paste more diatribe.

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How is it that the taxing authority in this country posts "diatribe?" That's an emotionally charged word to use against an agency that has to work under the law. But if you want more, here it is:

A. The Voluntary Nature of the Federal Income Tax System

1. Contention: The filing of a tax return is voluntary.

Some taxpayers assert that they are not required to file federal tax returns because the filing of a tax return is voluntary. Proponents of this contention point to the fact that the IRS itself tells taxpayers in the Form 1040 instruction book that the tax system is voluntary. Additionally, these taxpayers frequently quote Flora v. United States, 362 U.S. 145, 176 (1960), for the proposition that "[o]ur system of taxation is based upon voluntary assessment and payment, not upon distraint."

The Law: The word “voluntary,” as used in Flora and in IRS publications, refers to our system of allowing taxpayers initially to determine the correct amount of tax and complete the appropriate returns, rather than have the government determine tax for them from the outset. The requirement to file an income tax return is not voluntary and is clearly set forth in sections 6011(a), 6012(a), et seq., and 6072(a) of the Internal Revenue Code. See also Treas. Reg. § 1.6011-1(a).

Any taxpayer who has received more than a statutorily determined amount of gross income is obligated to file a return. Failure to file a tax return could subject the non-complying individual to criminal penalties, including fines and imprisonment, as well as civil penalties. In United States v. Tedder, 787 F.2d 540, 542 (10th Cir. 1986), the court stated that, “although Treasury regulations establish voluntary compliance as the general method of income tax collection, Congress gave the Secretary of the Treasury the power to enforce the income tax laws through involuntary collection . . . . The IRS’ efforts to obtain compliance with the tax laws are entirely proper.” The IRS warned taxpayers of the consequences of making this frivolous argument. Rev. Rul. 2007-20, 2007-1 C.B. 863.

Relevant Case Law:

Helvering v. Mitchell, 303 U.S. 391, 399 (1938) – the Supreme Court stated that “[i]n assessing income taxes, the Government relies primarily upon the disclosure by the taxpayer of the relevant facts . . . in his annual return. To ensure full and honest disclosure, to discourage fraudulent attempts to evade the tax, Congress imposes [either criminal or civil] sanctions.”

United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993), cert. denied, 510 U.S. 1193 (1994) – the court held that “[a]ny assertion that the payment of income taxes is voluntary is without merit.”

United States v. Tedder, 787 F.2d 540, 542 (10th Cir. 1986) – the court upheld a conviction for willfully failing to file a return, stating that the premise “that the tax system is somehow ‘voluntary’ . . . is incorrect.”

United States v. Richards, 723 F.2d 646, 648 (8th Cir. 1983) – the court upheld conviction and fines imposed for willfully failing to file tax returns, stating that the claim that filing a tax return is voluntary “was rejected in

Woods v. Commissioner, 91 T.C. 88, 90 (1988) – the court rejected the claim that reporting income taxes is strictly voluntary, referring to it as a “‘tax protester’ type” argument, and found Woods liable for the penalty for failure to file a return.

Other Cases:

United States v. Drefke, 707 F.2d 978, 981 (8th Cir. 1983), cert. denied sub nom., Jameson v. United States, 464 U.S. 642 (1983); United States v. Schulz, 529 F. Supp. 2d 341 (N.D.N.Y. 2007), aff'd, 517 F.3d 606 (2d Cir. 2008), cert. denied, 555 U.S. 946 (2008); Johnson v. Commissioner, T.C. Memo. 1999-312, 78 T.C.M. (CCH) 468, 471 (1999), aff’d, 242 F.3d 382 (9th Cir. 2000).

2. Contention: Payment of federal income tax is voluntary.

In a similar vein, some argue that they are not required to pay federal taxes because the payment of federal taxes is voluntary. Proponents of this position argue that our system of taxation is based upon voluntary assessment and payment. They frequently claim that there is no provision in the Internal Revenue Code or any other federal statute that requires them to pay or makes them liable for income taxes, and they demand that the IRS show them the law that imposes tax on their income. They argue that, until the IRS can prove to these taxpayers’ satisfaction the existence and applicability of the income tax laws, they will not report or pay income taxes. These individuals or groups reflexively dismiss any attempt by the IRS to identify the laws, thereby continuing the cycle. The IRS discussed this frivolous position at length and warned taxpayers of the consequences of asserting it. Rev. Rul. 2007-20, 2007-1 C.B. 863.

The Law: The requirement to pay taxes is not voluntary and is clearly set forth in section 1 of the Internal Revenue Code, which imposes a tax on the taxable income of individuals, estates, and trusts as determined by the tables set forth in that section. (Section 11 imposes a tax on the taxable income of corporations.)

Furthermore, the obligation to pay tax is described in section 6151, which requires taxpayers to submit payment with their tax returns. Failure to pay taxes could subject the non-complying individual to criminal penalties, including fines and imprisonment, as well as civil penalties.

In discussing section 6151, the Eighth Circuit Court of Appeals stated in Drefke that “when a tax return is required to be filed, the person so required ‘shall’ pay such taxes to the internal revenue officer with whom the return is filed at the fixed time and place. The sections of the Internal Revenue Code imposed a duty on Drefke to file tax returns and pay the appropriate rate of income tax, a duty which he chose to ignore.” United States v. Drefke, 707 F.2d 978, 981 (8th Cir. 1983), cert. denied sub nom., Jameson v. United States, 464 U.S. 642 (1983).

There have been no civil cases where the IRS’s lack of response to a taxpayer’s inquiry has relieved the taxpayer of the duty to pay tax due under the law. Courts have in rare instances waived civil penalties because they have found that a taxpayer relied on an IRS misstatement or wrongful misleading silence with respect to a factual matter. Such an estoppel argument does not, however, apply to a legal matter such as whether there is legal authority to collect taxes. See, e.g., McKay v. Commissioner, 102 T.C. 465 (1994), rev’d as to other issues, 84 F.3d 433 (5th Cir. 1996).

Relevant Case Law:

United States v. Schiff, 379 F.3d 621 (9th Cir. 2004), cert. denied, 546 U.S. 812 (2005); see also http://www.usdoj.gov/tax/txdv04551.htm. – the court affirmed a federal district court’s preliminary injunction barring Irwin Schiff, Cynthia Neun, and Lawrence N. Cohen from selling a tax scheme that fraudulently claimed that payment of federal income tax is voluntary. In subsequent criminal trials, these three individuals were convicted of violating several criminal laws relating to their scheme. See 2005 TNT 206-18. Schiff received a sentence of more than 12 years in prison and was ordered to pay more than $4.2 million in restitution to the IRS; Neun received a sentence of nearly 6 years and was ordered to pay $1.1 million in restitution to the IRS; and Cohen received a sentence of nearly 3 years and was ordered to pay $480,000 in restitution to the IRS. See http://www.usdoj.gov/opa/pr/2006/February/06_tax_098.html.

Adams v. Commissioner, 170 F.3d 173, 181-82 (3d Cir. 1999), cert. denied, 528 U.S. 1117 (2000) – the court affirmed the imposition of penalties for failure to file tax returns and pay tax, as Adams’ religious beliefs—payment of taxes to fund the military is against the will of God—did not constitute reasonable cause for failing to pay taxes.

United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993), cert. denied, 510 U.S. 1193 (1994) – the court stated that the “[taxpayers’] claim that payment of federal income tax is voluntary clearly lacks substance” and imposed sanctions in the amount of $1,500 “for bringing this frivolous appeal based on discredited, tax-protester arguments.”

Wilcox v. Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988) – the court rejected Wilcox’s argument that payment of taxes is voluntary for American citizens and imposed a $1,500 penalty against Wilcox for raising frivolous claims.

United States v. Bressler, 772 F.2d 287, 291 (7th Cir. 1985), cert. denied 474 U.S. 1082 (1986), – the court upheld Bressler’s conviction for tax evasion, noting that “[he] has refused to file income tax returns and pay the amounts due not because he misunderstands the law, but because he disagrees with it . . . . [O]ne who refuses to file income tax returns and pay the tax owing is subject to prosecution, even though the tax protester believes the laws requiring the filing of income tax returns and the payment of income tax are unconstitutional.”

United States v. Schulz, 529 F.Supp.2d 341 (N.D.N.Y. 2007), aff'd, 517 F.3d 606 (2d Cir. 2008), cert. denied, 555 U.S. 946 (2008) – the court permanently barred Robert Schulz and his organizations, We the People Congress and We the People Foundation, from promoting a tax scheme that helped employers and employees improperly stop tax withholding from wages on the false premise that federal income taxation is voluntary.

Packard v. United States, 7 F.Supp.2d 143, 145 (D. Conn. 1998), aff’d, 198 F.3d 234 (2d Cir. 1999) – the court dismissed Packard’s refund suit for recovery of penalties for failure to pay income tax and failure to pay estimated taxes where the taxpayer contested the obligation to pay taxes on religious grounds, noting that “the ability of the Government to function could be impaired if persons could refuse to pay taxes because they disagreed with the Government’s use of tax revenues.”

Other Cases:

Schiff v. United States, 919 F.2d 830, 833 (2d Cir. 1990), cert. denied, 501 U.S. 1238 (1991); United States v. Sieloff, 2009 WL 1850197, 104 A.F.T.R.2d (RIA) 2009-5067 (M.D. Fla. Jun. 25, 2009); United States v. Scott, 2009 WL 1439187, 103 A.F.T.R.2d (RIA) 2009-2336 (D.D.C. May 20, 2009); Horowitz v. Commissioner, T.C. Memo. 2006-91, 91 T.C.M. (CCH) 1120; Bonaccorso v. Commissioner, T.C. Memo. 2005-278, 90 T.C.M. (CCH) 554 (2005).

Skipping to number five, not because the omitted are inconvenient to my position, but rather because they aren't completely relevant to our discussion. Following is the aftermath of a refusal to submit to an audit:

5. Contention: Compliance with an administrative summons issued by the IRS is voluntary.

Some summoned parties may assert that they are not required to respond to or comply with an administrative summons issued by the IRS. Proponents of this position argue that a summons thus can be ignored. The Second Circuit’s opinion in Schulz v. IRS, 413 F.3d 297 (2d Cir. 2005) (“Schulz II”) is often inappropriately cited to support this proposition.

The Law: A summons is an administrative device with which the IRS can summon persons to appear, testify, and produce documents. The IRS is statutorily authorized to inquire about any person who may be liable to pay any internal revenue tax, and to summons a witness to testify or to produce books, papers, records, or other data that may be relevant or material to an investigation. I.R.C. § 7602; United States v. Arthur Young & Co., 465 U.S. 805, 816 (1984); United States v. Powell, 379 U.S. 48 (1964). Sections 7402(b) and 7604(a) of the Internal Revenue Code grant jurisdiction to district courts to enforce a summons, and section 7604(b) governs the general enforcement of summonses by the IRS.

Section 7604(b) allows courts to issue attachments, consistent with the law of contempt, to ensure attendance at an enforcement hearing "[i]f the taxpayer has contumaciously refused to comply with the administrative summons and the [IRS] fears he may flee the jurisdiction." Powell, 379 U.S. at 58 n.18; see also Reisman v. Caplin, 375 U.S. 440, 448-49 (1964) (noting that section 7604(b) actions are in the nature of contempt proceedings against persons who “wholly made default or contumaciously refused to comply,” with an administrative summons issued by the IRS). Under section 7604(b), the courts may also impose contempt sanctions for disobedience of an IRS summons.

Failure to comply with an IRS administrative summons also could subject the non-complying individual to criminal penalties, including fines and imprisonment. I.R.C. § 7210. While the Second Circuit held in Schulz II that, for due process reasons, the government must first seek judicial review and enforcement of the underlying summons and to provide an intervening opportunity to comply with a court order of enforcement prior to seeking sanctions for noncompliance, the court’s opinion did not foreclose the availability of prosecution under section 7210.

Relevant Case Law:

Schulz v. IRS, 413 F.3d 297 (2d Cir. 2005) (“Schulz II”) – the court, upholding its prior per curiam opinion, reported at Schulz v. IRS, 395 F.3d 463 (2d Cir. 2005) (“Schulz I”), held that, based upon constitutional due process concerns, an indictment under section 7210 shall not lie and contempt sanctions under section 7604(b) shall not be levied based on disobedience of an IRS summons until that summons has been enforced by a federal court order and the summoned party, after having been given a reasonable opportunity to comply with the court’s order, has refused. The court noted that “[n]either this opinion nor Schulz I prohibits the issuance of pre-hearing attachments consistent with due process and the law of contempts.” Schulz II, 413 F.3d at 304.

United States v. Becker, 58-1 U.S.T.C. ¶ 9403 (S.D.N.Y. 1958), aff’d, 259 F.2d 869 (2d Cir. 1958) (per curiam), cert. denied, 258 U.S. 929 (1959) – in a case in which the defendant failed to produce certain books and records specified in an IRS summons, claiming that the books and records had been destroyed by fire, the court found that based upon the evidence (including the fact that some of the specified books were subsequently produced in compliance with a grand jury subpoena), Becker willfully and knowingly neglected to produce information called for by a summons in violation of section 7210

quote:

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The law and courts allow me to refuse to allow the government to inspect my books and records. And the Supreme Court says that I cannot be penalized for doing so.

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posted December 03, 2013 08:29 PM            

2. Contention: Federal income taxes constitute a “taking” of property without due process of law, violating the Fifth Amendment.

Some individuals or groups assert that the collection of federal income taxes constitutes a “taking” of property without due process of law, in violation of the Fifth Amendment. Thus, any attempt by the IRS to collect federal income taxes owed by a taxpayer is unconstitutional.

The Law: The Fifth Amendment to the United States Constitution provides that a person shall not be “deprived of life, liberty, or property, without due process of law . . . .” The United States Supreme Court stated that “it is . . . well settled that [the Fifth Amendment] is not a limitation upon the taxing power conferred upon Congress by the Constitution; in other words, that the Constitution does not conflict with itself by conferring, upon the one hand, a taxing power, and taking the same power away, on the other, by the limitations of the due process clause.” Brushaber v. Union Pacific R.R., 240 U.S. 1, 24 (1916). Further, the Supreme Court has upheld the constitutionality of the summary administrative procedures contained in the Internal Revenue Code against due process challenges, on the basis that a post‑collection remedy (e.g., a tax refund suit) exists and is sufficient to satisfy the requirements of constitutional due process. Phillips v. Commissioner, 283 U.S. 589, 595‑97 (1931).

The Internal Revenue Code provides methods to ensure due process to taxpayers: (1) the “refund method,” set forth in section 7422(e) and 28 U.S.C. '' 1341 and 1346(a), where a taxpayer must pay the full amount of the tax and then sue in a federal district court or in the United States Court of Federal Claims for a refund; and (2) the “deficiency method,” set forth in section 6213(a), where a taxpayer may, without paying the contested tax, petition the United States Tax Court to redetermine a tax deficiency asserted by the IRS. Courts have found that both methods provide constitutional due process.

The IRS discussed this frivolous argument in more detail and warned taxpayers of the consequences of attempting to pursue a claim on these grounds. Rev. Rul. 2005-19, 2005-1 C.B. 819.

For a discussion of frivolous tax arguments made in collection due process cases arising under sections 6320 and 6330, see Section II of this outline.

Relevant Case Law:

Flora v. United States, 362 U.S. 145, 175 (1960) – the Supreme Court held that a taxpayer must pay the full tax assessment before being able to file a refund suit in district court, noting that a person has the right to appeal an assessment to the Tax Court “without paying a cent.”

Schiff v. United States, 919 F.2d 830 (2d Cir. 1990), cert. denied, 501 U.S. 1238 (1991) – the court rejected a due process claim where the taxpayer chose not to avail himself of the opportunity to appeal a deficiency notice to the Tax Court.

3. Contention: Taxpayers do not have to file returns or provide financial information because of the protection against self-incrimination found in the Fifth Amendment.

Some individuals or groups claim that taxpayers may refuse to file federal income tax returns, or may submit tax returns on which they refuse to provide any financial information, because they believe that their Fifth Amendment privilege against self-incrimination will be violated.

The Law: There is no constitutional right to refuse to file an income tax return on the ground that it violates the Fifth Amendment privilege against self‑incrimination. As the Supreme Court has stated, a taxpayer cannot “draw a conjurer’s circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law.” United States v. Sullivan, 274 U.S. 259, 264 (1927). The failure to comply with the filing and reporting requirements of the federal tax laws will not be excused based upon blanket assertions of the constitutional privilege against compelled self‑incrimination under the Fifth Amendment.

The IRS discussed this frivolous argument in more detail and warned taxpayers of the consequences of attempting to pursue a claim on these grounds. Rev. Rul. 2005-19, 2005-1 C.B. 819.

Relevant Case Law:

Sochia v. Commissioner, 23 F.3d 941 (5th Cir. 1994), cert. denied, 513 U.S. 1153 (1995) – the court affirmed tax assessments and penalties for failure to file returns, failure to pay taxes, and filing a frivolous return and imposed sanctions for pursuing a frivolous case because the taxpayers claimed a Fifth Amendment privilege on each line calling for financial information, rather than provide any information on their tax return about income and expenses.

United States v. Neff, 615 F.2d 1235, 1241 (9th Cir. 1980), cert. denied, 447 U.S. 925 (1980) – the court affirmed a failure to file conviction, noting that the taxpayer “did not show that his response to the tax form questions would have been self-incriminating. He cannot, therefore, prevail on his Fifth Amendment claim.”

United States v. Schiff, 612 F.2d 73, 83 (2d Cir. 1979) – the court said that “the Fifth Amendment privilege does not immunize all witnesses from testifying. Only those who assert as to each particular question that the answer to that question would tend to incriminate them are protected . . . . [T]he questions in the income tax return are neutral on their face . . . [h]ence privilege may not be claimed against all disclosure on an income tax return.”

United States v. Brown, 600 F.2d 248, 252 (10th Cir. 1979), cert. denied, 444 U.S. 917 (1979) – the court held Brown made “an illegal effort to stretch the Fifth Amendment to include a taxpayer who wishes to avoid filing a return.”

United States v. Daly, 481 F.2d 28, 30 (8th Cir. 1973), cert. denied, 414 U.S. 1064 (1973) – the court affirmed a failure to file conviction, rejecting the taxpayer’s Fifth Amendment claim because of his “error in . . . his blanket refusal to answer any questions on the returns relating to his income or expenses.” http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Section-I#_Toc350157902

It's clearly NOT that my mind is made up on the subject. It's that evidence shows the correctness of my position. I don't even care that you're of the opinion that you have. I only care that you NOT accidentally mislead people by using your perceived credibility as a replacement for actual factual truth.

quote:

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Saying they will go back six years is hogwash.

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From the first page of this thread, from a tax attorney's website:

When you don’t show up, the IRS will take one of three actions:

Conduct the audit without you. The IRS may also examine tax years not covered by the initial audit. The auditor may look at all open years—returns due and filed within the past three years. And if the auditor suspects serious misdeeds, he may go back as far as six years.

Do you have some citation disproving that?

quote:

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You assume that I perjure myself.

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You assume I'm talking about literal you. I can't assess the validity of your returns, and whether or not they're in compliance with the law.

quote:

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2. Summonses can be ignored.

3. And there can be no penalty (according to the Supreme Court) for ignoring a summons.

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Just disproved both of those.

quote:

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Furthermore, I am merely relying upon the above authorities in making my decision not to submit to the bluff of an IRS audit and/or summons.

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This is factually inaccurate. You are not relying upon the word of the IRS in your claim that you can ignore summons.

quote:

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What about this are you not understanding, AG?

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It's not my understanding that's at issue here. It's yours.

quote:

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A large part of my law practice will be defending clients charged with "willful failure to file" and clients who are being sued by third party debt collectors.

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Thus far, that sounds unfortunate.

quote:

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I AM NOT A LAWYER, AND I AM NOT GIVING LEGAL ADVICE. I AM GIVING LEGAL INFORMATION. THERE IS A DIFFERENCE BETWEEN GENERAL LEGAL INFORMATION AND LEGAL ADVICE

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Big for that! I'm not sure that I'll agree with you about it being legal information, but let me read on...

That's a nice premise, but a little fanciful for me. The only time bill collectors will sue is when they have ample evidence of the person's ability to pay the debt. Otherwise, they simply harass and eventually drop it/write it off. Any debtor can stop the harassment part by either making a deal with the bill collector or by signing up with a credit counseling agency and consolidating their debt. The credit counselors will get the harassment to stop, lower the interest rate, and attempt to make it affordable for the debtor to get out of debt.

quote:

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In regard to the former, I am not deluded into thinking I will always win in failure to file cases...but I will win some of them.

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That's good. Failure is going to happen, so you might as well be prepared.

quote:

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NON-TAXPAYER BEATS IRS IN TENNESSEE COURT BATTLE

---

Back to misleading. In this instance, I'll let a blog that deals with all of these notions say it for me. I had started on replying, but this blog may have organized it better:
_______
Tax protestors will ALWAYS mention the case of U.S. v. Lloyd Long as the "victory" which "proves" that income taxes don't have to be paid. The truth:

• First -- Long lost his civil case and was still liable for his taxes. The case the protestors stupidly refer to is Long's criminal case for tax evasion, which he won on, essentially, the dubious theory that he was too dumb to understand that he had to pay taxes. But Long -- like so many others -- completely failed to prove that he wasn't liable for his taxes.

• Second -- In every case since Long the tax protestors have lost. They have had NO victories since then, and can't point to any, (not that Long can really even be characterized as a victory since he lost his battle to prove he wasn't liable for taxes). So if the Long case is precedent for anything, which is doubtful, it sure isn't very good precedent because NO SUBSEQUENT COURT HAS RELIED ON THE LONG CASE FOR THE ABSURD PROPOSITION THAT THERE IS NO LIABILITY FOR TAXES.

  NOTE: By like token, we often get hate e-mail from tax protestors who send us cases from around the turn of the century (i.e., before the 16th Amendment authorized the income tax) or from the 1930s and 1940s (i.e., before the modern IRS code). Apparently, they can't figure out that LAWS CHANGE. And they NEVER send us cases from this decade -- the reason being that every case from this decade (and the last, for that matter) has been a loser for tax protestors.

quote:

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What is Willful Failure to File?

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A good way to get into trouble with the IRS. See: http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Section-I#_Toc350157889

quote:

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"Held: 1. A good-faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable.

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This goes back to the aforementioned Long case. It's stupid really. You can get off the hook for not filing, in theory, based upon claiming a understanding of the law that is essentially a misunderstanding of the law.

quote:

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IRS vs. Kuglin

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Kuglin still had to pay her taxes in the end. http://tpgurus.wikidot.com/vernice-kuglin

quote:

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AG says judges always side with the IRS regarding a summons.

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I didn't actually say "always," but I do believe they side with the IRS far more often than they don't.

quote:

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The IRS was attempting to determine the correct federal income tax liability of the Henderson's for the years of 1985, 1986, 1987, 1988 and1989,

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And you said six years was "hogwash".

This is a weird case to bring up as proof that judges don't always side with IRS summons. The judge here didn't take issue with the act of summoning in this case. They took issue with the fact that they weren't certified attested copies. It doesn't seem unusual for a judge to insist on the government following its own procedures.

quote:

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Reversed, vacated, and remanded! Court reverses conviction and states that if a taxpayer sincerely believes his arguments against taxes, it negates "willfulness."

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I think we've sufficiently covered the stupidity defense. It may get you out of criminal charges with regard to your not having filed, but it won't get you out of the taxes you owe.

posted December 03, 2013 10:36 PM            

by Frederick Mann

Disclaimer
This report is intended purely as a communication of information in accordance with the right of free speech. It does not constitute legal or tax advice. Anyone seeking legal or tax advice should consult a competent professional. Neither the author, editor, or publisher assumes any responsibility for the consequences of anyone acting according to the information in this report. Readers are specifically advised to obey all laws to the letter.

U.S. V. LLOYD R. LONG
The following article is reprinted from the December 1993 edition of Free Enterprise Society News, 300 W. Shaw Ave. #205, Clovis, Calif. 93612:

"A not guilty verdict came in the Eastern District of Tennessee in the case of U.S. v. Lloyd R. Long, #CR-1-93-91. The verdict came on October 15th, 1993.

This was an amazing case involving the income tax. A Chattanooga jury agreed with the argument by Long that the income tax is actually an excise tax and only applies to certain classes of people.

Nationally prominent attorney Lowell Becraft, of Huntsville Alabama, assisted by attorney Russell J. Leonard of Sewanee, Tennessee, defended Lloyd R. Long of Decherd, Tennessee. Long was charged with willful failure to file income tax returns for 1989 and 1990.

In presenting the case for the IRS, the government, represented by assistant US attorney Curtis Collier assisted by special agent Michael Geasley of the IRS, declared that Long had grossed income in excess of $49,000.00 for each year, and that he willfully failed to file income tax returns.

The defense admitted that Long had an income in excess of $49,000.00 for each year in question, and that he did not file a return. He then proceeded to prove to the jury beyond a reasonable doubt that he was not liable for an income tax, nor was he required by law to file.

Defense testimony showed a case titled Brushaber v. Union Pacific Railroad wherein it was the unanimous decision of the US Supreme Court that the 16th amendment did not give Congress any new power to tax any new subjects; it merely tried to simplify the way in which the tax was imposed. It also showed that the income tax was in fact an excise tax on corporate privileges and privileged occupations. The defense then brought out a case entitled Flint v. Stone Tracy wherein an excise tax was defined as a tax being laid upon the manufacture, sale and consumption of commodities within the country; upon licenses to pursue certain occupations; and upon corporate privileges.

Mr. Long's attorneys also brought out a case entitled Simms v. Arehns, wherein the court ruled that the income tax was neither a property tax nor a tax upon occupations of common right, but was an excise tax.

The defense then brought out a case entitled Redfield v. Fisher, wherein the court ruled that the individual, unlike the corporation, cannot be taxed for the mere privilege of existing, but that the individual's right to live and own property was a natural right upon which an excise cannot be imposed. Defense also pointed to a couple of studies done by the Congressional Research Service that shows the income tax is an excise.

Next, defense pointed out that in Tennessee Supreme Court case Jack Cole v. Commissioner the court ruled that citizens are entitled by right to income or earnings and that right could not be taxed as a privilege. In another Tennessee Supreme Court case Corn v. Fort the court ruled that individuals have the right to combine their activities as partnerships; and that this is a natural right independent and antecedent of government.

The prosecution did not challenge or attempt to refute any of these cases cited, or the conclusions of the courts.

Defense brought out in testimony the fact that nowhere in the entire IRS Code was anyone actually made liable for the income tax. They showed that in the IRS's own privacy act notice only three sections were cited, and that none of these sections made anyone liable for the tax. They also proved that this was not an oversight by showing that the alcohol tax was worded so clearly that no one could misinterpret who was liable for the alcohol tax.

Prosecution did not challenge or attempt to refute this point, nor were they able to show a statute that made anyone liable for the income tax.

Defense then presented the mission statement of the IRS stating that the income tax relied upon voluntary compliance, and a statement from the head of the alcohol and tobacco tax division of the IRS which in essence showed that the income tax is 100% voluntary, as opposed to the alcohol tax, which is 100% mandatory.

Mr. Long stated that in 1989 he knew that the income tax was in fact an excise tax; and that he was not enjoying any corporation; and that income or earnings from the exercise of common right could not be taxed as an excise or otherwise; and that nowhere in the IRS Code was he made liable for the tax; and that the income tax was voluntary. Long then stated he was so intimidated by the IRS that he filed and paid his voluntary assessment.

He then began a series of letters to the IRS explaining that he had no licenses or privileges issued to him by the federal government. He asked for direct answers to simple questions, such as "Am I required to file federal income tax returns?"; and "Am I liable for federal income taxes?" The IRS never gave a direct answer to any questions. Instead they inferred and insinuated and extrapolated and beat around the bush, and generally avoided answering. So Mr. Long testified that he decided to stop volunteering.

The IRS brought in 2 expert witnesses. Both were actually IRS employees who had received training as professional witnesses. Upon cross-examination by Attorney Becraft, one witness, a Ms. Jeu, stated that a secret code known only to the IRS, and encoded on Mr. Long's permanent record, showed that the IRS knew that he was not required to mail or file a return. Ms. Jeu made every effort to avoid this admission to the point that she was beginning to frustrate the jury. The other witness, upon cross-examination by Becraft gave testimony that conflicted with the Privacy Act notice.

The government also attempted to institute "guilt by association" in that they claimed Mr. Long had known and relied upon persons of questionable character. They argued that the writers of some of the books he read and people he knew had been convicted of tax-related charges in the past and were in fact criminals.

Long responded that just because a person had been convicted of a crime by a court, did not invalidate everything said. To illustrate his point, he pointed out that apostle Paul was a murderer, but that by the grace of God he became the greatest of the Apostles. Mr. Long added that he did not rely on anything that he did not personally check out thoroughly.

In summation Attorney Larry Becraft reminded them that Galileo was imprisoned for holding a belief that conflicted with one which everyone else knew as a fact; and that Columbus, acting on a belief which conflicted with what everyone else knew as a fact, discovered something no one else thought existed.

The jury agreed with the defense. By finding Mr. Long "Not Guilty" on all counts they have ventured into history as preservers of freedom.

A Chattanooga TV Station quoted a government spokesman as saying that this case will change the way the IRS will handle such cases in the future. They indicated that they will be less likely to prosecute if a jury isn't going to decide in their favor.

Mr. Long's spirit was best expressed when he was asked for a final statement by a reporter as he was leaving the courtroom. His words: "To God be the glory!"
Congratulations, Lloyd!"

"I DON'T WANT TO FIGHT THE IRS"
Before analyzing the Becraft Landmark case, I want to address an emotional issue. For emotional reasons many people fear the IRS. They have seen horror stories about IRS victims on TV and read about them in the newspapers. They don't want to rock the IRS boat because they fear they might become an IRS victim. They know that the IRS is a terrorist organization that can take their personal property, destroy their business, and ruin their lives. Their fear and emotion prevents them from thinking rationally about the IRS.

The IRS could even utilize their terrorist brothers from the Bureau of Alcohol, Tobacco and Firearms to slaughter anyone who tries to rock the boat. Did you see the pictures of the Waco massacre on TV?

The following article appeared in The Arizona Republic of May 19, 1994:

"IRS failing to collect millions, report says
'92 audit level was half what it was in '81

The Associated Press
WASHINGTON - The Internal Revenue Service failed to collect $127 billion in taxes from 1992. Yet audits that might have curbed the ever-growing tax gap were conducted at half the rate of 11 years earlier, a congressional report says.

"IRS major enforcement activities have not grown over the past decade," according to the General Accounting Office, the auditing arm of Congress.

From 1981 to 1992, the odds of getting audited fell from l-in-20 to l-in-33 for corporations and from l-in-56 to 1-in-110 for individuals.

Those numbers may be misleadingly optimistic, the congressional agency said.

"IRS classifies certain taxpayer contacts as audits, when in fact taxpayers' books and records were not examined," it said.

The $127 billion tax gap in 1992, the latest year available, was 67 percent larger than the $76 billion gap in 1981. If all of it had been collected, it would have cut the record $290 billion budget deficit of 1992 nearly in half.

The gap represented 18 percent of what taxpayers owed the government. IRS Commissioner Margaret Milner Richardson has vowed to reduce that to 10 percent by the year 2000.

Frank Keith, a spokesman for the IRS, said the compliance rate should start improving noticeably in several years as the IRS brings more-modern computer equipment on line and completes research that should better identify taxpayers who are most likely to pay less than they owe.

But the report notes that Congress has been funding stepped-up enforcement efforts since the late 1980s, with poor results.

"Enforcement staffing has been declining since 1988 and is about what is was in 1987. Because of overall budget shortfalls, IRS has reallocated funds from compliance initiatives to non-enforcement efforts, such as returns processing," the report says.

The compliance and enforcement staff declined from 57,470 in 1988 to 51,305 in 1992.

The report recommends that the IRS more strongly focus its compliance efforts on areas most likely to bear fruit, such as small companies and sole proprietorships, without waiting for the results of research.

Simply doing a better job of matching financial information, such as forms on partnership income, to taxpayers' returns should yield large results, it says.

The report also urges the IRS to revamp procedures to emphasize early telephone contact with delinquent taxpayers rather using the mail. And it said that if the IRS did a better job of answering its phones, taxpayers would be less likely to pay too little." [emphasis added]

The most important lesson to be learned from the above is that the IRS has limited resources. There are at least 10 million people in the U.S. who don't file tax returns nor pay federal income taxes - people the IRS claims should file and pay. The real number may be much higher: 20 or 30 million. In fact, there is an explosion of people opting out of the tax system. Every week I hear of a new organization that "untaxes" people. This is an unstoppable tide the IRS is powerless against. The probability of the IRS "going after" a particular individual is very small.

IS THE IRS REALLY A PAPER TIGER?
According to tax attorney Donald W. MacPherson (Tax Fraud & Evasion: The War Stories - one of the best tax books I know of):

"Once you get past all of the tax statutes passed by Congress, the rules of evidence and of criminal procedure, interpretation by the courts of the laws and the rules, you are left with human drama. Conflict. IRS special agent versus citizen target. Justice Department prosecutor versus defense attorney. The final arbitrator of this combat is the jury of twelve. That which is public record is but one-tenth of the story. The flesh and blood war stories are intended to cut through the legalese to the end that you will be brought to understanding, and through understanding harbor fear no longer. Nor will the Monster, discovered as a paper tiger, any longer intimidate you, the sovereign citizen, the master. Beastmaster...

Failure to file an income tax return, failure to pay income taxes, and attempted income tax evasion are not crimes in this country. Not yet anyway. For those acts (or failures to act) to constitute a crime, one first must act with specific intent to violate the law; knowing what the law forbids or requires, one must set out with the specific purpose to violate the law. Willfulness. Specific criminal intent. Ignorance of the law is an excuse. Congress has declared that the tax laws are so complex that ignorance of the law is a defense so far as it goes to the citizen's state of mind; or, in other words, so far as it tends to negate willfulness.

Second, the government must assemble evidence and prove beyond a reasonable doubt to the satisfaction of twelve jurors that you intended to violate the law. If good faith belief or misunderstanding or reliance on the advice of counsel is raised, then the government must, in effect, prove beyond a reasonable doubt that you did not believe in good faith or did not in good faith rely on the advice of your attorney or accountant. At least some federal appellate courts hold that the belief or misunderstanding is subjective not objective. This nuance means, in the final analysis, that it is not even relevant whether what you believed was right or wrong, or whether the jury determines it was reasonable or unreasonable for you to so believe what you claim you believed. All that matters is whether you in fact believed it. Put another way, the government must, then, prove beyond a reasonable doubt that you did not believe what you claim you believed.

Is it any wonder then the fine-tune processing by IRS and Justice Department of criminal tax cases? After two years of investigation by the IRS special agent of the Criminal Investigation Division (CID) and review by his supervisor, plus further review by chief of CID and IRS District Director, the case then goes to the office of District Counsel, the IRS lawyers, for review. Then to Justice Department in Washington, D.C. for review where it may remain for another year or two. Then back to the local U.S. Attorney for further fine-tuning and additional investigation, if necessary, and the ultimate prosecution by way of grand jury indictment or, in the case of misdemeanor rather than felony, by a charging paper signed by the U.S. Attorney, called an "Information." A long, arduous pipeline. For the Beast can ill afford to lose criminal tax cases. If IRS cannot succeed in putting behind bars those it believes to be tax cheats, what then the impact upon the remaining one hundred million and our system based upon "voluntary compliance?"

... Just how far can you push IRS and not be prosecuted? What are the "limits of the tax law?" What must the IRS prove? The answers are found in the criminal tax cases that are won! The proof is in the pudding. If an Arkansas woman who did not file a tax return for eighteen years beat IRS at criminal charges, by what should you feel intimidated?

Consider this analogy: you go to a haunted house as a child and under cover of darkness are frightened by ghosts and goblins. Your imagination runs wild while at the house, and later you attempt, without success, to stave off recurring nightmares. In effort to put the matter to rest, your parents take you during daylight hours back to the haunted house and show you the tricks of the trade. The props used. That goblin was but one-sixteenth inch cardboard. Cardboard which even as a child, you could rip apart with your bare hands. Don't you feel silly? The nightmares go away...

The paper tiger. The bureaucrat, also known as the bureaurat. If the IRS agent was truly competent and was not lazy, why had he not struck out for business on his own? Coffee and cigarettes and federal service retirement pay? The paper tiger exposed by the light of day. But who would dare to turn on the switch, or open the curtain, for this vampire Monster to be exposed to sunlight?"

BUT EVEN IF YOU FOLLOW THEIR RULES,
THEY MAY "COME AFTER" YOU
The following IRS atrocity story comes from Tax Revolt: The Battle for the Constitution by Martin A. Larson, who got it from the Rocky Mountain News of May 3, 1979. It is the story of Jasper and Lucille Gates of Denver, CO, which began when they received a letter from the IRS stating that they had overpaid their 1972 tax by $1,197. However, they never received a refund. Instead, in June 1974 they were notified, without explanation, that they owed $4,451. Soon another letter came, claiming the deficiency was $4,206. In October the IRS claimed they owed $13,700, in November it was $15,000. By October 1975 the alleged deficiency had grown to $16,000 - all without explanation. Then in August 1978 the IRS seized their bank accounts worth about $13,000 and their home worth about $100,000. They sold the home for $16,000. Mrs. Gates, in a wheel-chair, was evicted. With the help of sheriff's deputies, the Gates' furniture and personal effects were thrown into the street. When the news media contacted the IRS, the response was that the IRS couldn't comment because of the Privacy Act.

The next IRS atrocity story is also one where the victims followed the "IRS rules." In June, 1988 Kay Council of High Point, NC came home one night to find a note from her husband, Alex: "My dearest Kay - I have taken my life in order to provide capital for you. The IRS and its liens which have been taken against our property illegally by a runaway agency of our government have dried up all sources of credit for us. So I have made the only decision I can. It's purely a business decision... You will find my body on the lot on the north side of the house." At the end of a nine-year battle over a disallowed tax shelter, the IRS claimed that the Councils owed $300,000 in taxes, interest, and penalties. When their financial resources were exhausted, Mr. Council committed suicide to provide Mrs. Council with $250,000 insurance money to continue the battle. Ironically, Mrs. Council eventually won a court ruling that she and her husband owed the IRS nothing - the IRS deficiency notice had been sent four months after the statute of limitations had expired. Mrs. Council, 48, said, "I was cheated of growing old with the man I love." (This case was also the subject of a Money magazine cover story at the time.)

The important thing to realize here is that whether or not you follow the supposed "rules" of the IRS, you are at risk. I don't know who is most at risk, those who follow the "rules," or those who don't. It's quite possible that those who have least contact with the IRS are also least at risk. You could argue, "I don't want to fight the IRS, therefore I will have nothing to do with them. I won't file returns and I won't pay." Or, "I'll be a good boy (or girl), file my returns, and pay them - because I want to fight the IRS." An extensive survey would have to be done to determine if the above arguments are closer to the truth than, "I don't want to fight the IRS, therefore I'll file and pay."

In the absence of conclusive evidence, the last is merely an emotional argument with no foundation.

THE 16TH AMENDMENT
The first important point is that the Sixteenth Amendment to the U.S. Constitution does not grant the federal government any new taxing power. In other words, the 16th Amendment is nothing but a smoke screen, used by the IRS to pull the wool over the eyes of the ignorant and the naive.

There is also a question about whether the 16th Amendment was properly ratified. In their book, The Law That Never Was: The Fraud of the 16th Amendment and Personal Income Tax (Constitutional Research Associates, PO Box 550, South Holland, IL 60473; 1985), Bill Benson and M.J. "Red" Beckman provide conclusive evidence that the 16th Amendment was not properly ratified. For a summary of their findings, you may want to read the excellent book, The Federal Zone: Cracking the Code of Internal Revenue, by Mitch Modeleski (Account for better citizenship, c/o PO Box 6189, San Rafael, Calif., PZ 94903/TDC.)

This raises the issue of judicial fraud. Because the U.S. Constitution severely limits what the federal government may do, judicial fraud has been resorted to in order to create and expand various federal agencies not authorized by the Constitution. The 16th Amendment was gotten onto "the books" through judicial fraud.

THE BECRAFT STRATEGY
Mr. Becraft's strategy was to establish in court certain weaknesses of the IRS, namely:

The supposed "income tax" is really an excise tax which only applies to certain classes of people, engaged in certain activities.
The 16th Amendment grants no additional taxing power to the federal government.
An individual (as opposed to a corporation) has a natural right to live, work, and own property, without being taxed.
Individuals have the right to produce earnings and income, not subject to taxation.
Individuals have the right to combine their activities in the form of partnerships; this is a natural right, independent of and antecedent to government.
[This is a very important principle. The American political system is based on the principle that individuals have rights which precede the Constitution and are not dependent on it. In other words, the Constitution or Bill of Rights doesn't grant any rights; our rights are senior to these documents. The Constitution does grant the federal government certain very limited powers which are specified. It also stipulates, through the Bill of Rights, that the federal government's role is limited to the specific powers granted. As a result, today, practically everything the federal government does is unconstitutional, illegal, and criminal. A famous Supreme Court case reflects the seniority of individual rights to government:

"The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no such duty [to submit his books and papers for an examination] to the State, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land [Common Law] long antecedent to the organization of the State, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest or seizure except under a warrant of the law. He owes nothing to the public so long as he does not trespass upon their rights." Hale v. Henkel, 201 U.S. 43 at 47 (1905).

Nowhere in the entire Internal Revenue Code is any individual made liable for the income tax. This is not an oversight. In contrast to the income tax, the alcohol tax is so clearly worded that nobody could misinterpret who is liable for it. (The prosecution did not attempt to challenge or refute this point. They were unable to show a statute that makes anyone liable for the income tax.)
The mission statement of the IRS states that the income tax relies upon voluntary compliance. (The head of the alcohol and tobacco tax division of the IRS has stated to Congress that the income tax is 100% voluntary, while the alcohol tax is 100% mandatory.)
In his own defense Mr. Long then stated the following:

The income or earnings from the exercise of an individual's common right cannot be taxed as an excise or otherwise.
Nowhere in the IRS Code does it make him liable for the tax.
The income tax is voluntary.
Mr. Long sent the IRS a series of letters, asking the IRS questions such as, "Am I required to file income tax returns?" and "Am I liable for federal income taxes?" The IRS never gave a direct answer to any questions. [Through this series of letters, Mr. Long created a legal foundation. The fact that he believed he was not liable was legally established. This makes it very difficult for Mr. Long to be convicted of a crime, which requires willful intent - the knowing intent to do wrong. Mr. Long established that he could not be guilty of willful failure to file, because he believed he didn't have to file. This principle has been upheld by the U.S. Supreme Court: "If the defendant had a subjective good faith belief, no matter how unreasonable, that he was not required to file a tax return, the government cannot establish that the defendant acted willfully." Cheek v. U.S., 111 S.C. 604 (1991).]
The IRS then brought in their two expert witnesses. One of them, Ms. Jeu, admitted under cross-examination by Mr. Becraft that:

The IRS used a secret code, known only to them, by which certain people were classified by the IRS as not liable.
In their own system the IRS had classified Mr. Long as not liable for federal income tax.
The above admissions by the IRS witness must have been the final nails in the coffin of the IRS's case.

COUNTS AND PRE-TRIAL MOTIONS
It is instructive to examine the counts for which Mr. Long was prosecuted, as well as the pre-trial motions. Mr. Long was charged under two counts of willful failure to file income tax returns for 1989 and 1990. After stating in many words that Mr. Long was supposed to file, each count proceeds: "... that well knowing and believing all of the foregoing, he did willfully fail to make an income tax return... " Of course, during the trial Mr. Long established that he did not know and did not believe that he was supposed to file. The IRS failed to write to him that he was supposed to file, when he requested that information. Furthermore, the IRS had classified Mr. Long as someone not liable. [It boggles the imagination that the IRS could have been so stupid as to prosecute Mr. Long!] Note that Mr. Long was prosecuted for failure to file tax returns - not for failure to pay federal income taxes.

Mr. Long filed a motion requesting a bill of particulars to specify which statute he was alleged to have violated, because the statute cited in the counts he was charged with, mentioned only the penalty for willful failure to file, so it must have been some other statute that was allegedly violated.

The prosecution responded with a motion opposing the request for a bill of particulars on the grounds that it was "... typical of motions filed in tax protestor cases. This motion is frivolous and places an unnecessary burden upon the resources of the court... " The request for a bill of particulars was denied.

Next, Mr. Long filed two motions to have a list of the jury panel for his trial released to him at least 30 days before his trial, so he could establish if any of the jurors had been subjected to tax audits or other investigations. The prosecution had no objection to these motions and they were granted.

Mr. Long also filed three motions requesting that a wide range of information concerning the officers who investigated his case, as well as prosecution witnesses, and information relating to IRS administrative and computer systems, be made available to him. The prosecution objected to these motions on the grounds that they were essentially frivolous and typical of tax protestors.

The court denied Mr. Long's motions, with the exception that:
"Upon request of the defendant the government shall permit the defendant to inspect and copy or photograph books, papers, documents, photographs, tangible objects, buildings or places, or copies of portions thereof, which are within the possession, custody or control of the government, and which are material to the preparation of the defendant's defense or are intended for use by the government as evidence in chief at the trial, or were obtained from or belonged to the defendant."

Mr. Long then filed a motion to dismiss the case against him, partly on the grounds that the counts against him failed to charge an offense and that he was not within the purview of the Internal Revenue Code. This motion was dismissed.

Mr. Long also filed a brief to ensure that during the trial he would be able to fully testify in his own defense, submitting as evidence citations of all relevant court cases relating to his defense. This is a very important brief, because it counters the attempt often made by the prosecution in tax cases to prevent the defendant from defending himself, by ruling certain evidence inadmissible.

Specifically, what filing such a brief does is get "on the record" (so it can be used in court later) the "legal foundation" on which the defendant is basing his or her defense. This is important in establishing to the jury "subjective good faith belief" as discussed earlier. This solid legal foundation concerning your "subjective good faith belief" is critical to successfully refute the government's claim that you had the "specific intent" to "willfully avoid a known legal duty."

To reiterate, if you truly believe you have no legal duty - based on your solid, good faith legal foundation - to file, the government is unlikely to be able to prove its case beyond a reasonable doubt to a jury. So you win! Of course, if you lay the proper foundation early, it's extremely unlikely that the government would be foolish enough to prosecute you.

Mr. Long then filed a 22-page brief challenging the admissibility of computer evidence. The basic argument is that evidence derived from computer records long after the event was not admissible. The fact that computer records indicate that someone didn't file doesn't constitute evidence that he didn't file. [This brief could have been a "red herring" to misdirect the prosecution into believing that the main thrust of the defense would be that the prosecution couldn't prove that the defendant hadn't filed.

JURY INSTRUCTIONS
A "defendant's supplemental requested jury instructions" was filed. The purpose was to clearly establish in the minds of the jurors what the prosecution had to prove in order to establish guilt. These were the most important requested jury instructions:

For the government to prove guilt, the following three elements need to be established beyond reasonable doubt:
The defendant is a person required to file a return.
The defendant failed to file a return.
The defendant's failure to file a return was willful.
The burden is on the prosecution to prove every one of the above elements.
The defendant may rely on a "good faith defense" - "If a person in good faith believes that he has done all that the law requires, he cannot be guilty of the criminal intent to willfully fail to file a tax return."
FREEDOM TECHNOLOGY
Freedom Technology consists of the knowledge, skills, and methods to live free - the street-smart know-how to outwit freedom-violators at every turn. It also includes the means to protect yourself, your income, and your assets against onslaughts by freedom-violators. Ultimately, Freedom Technology also includes the means to blow away the bogus power of the freedom-violating elite.

The Long case illustrates all these aspects of Freedom Technology. Mr. Long obviously did acquire some knowledge on how to deal with the IRS. He created a legal foundation by writing a series of letters to the IRS. We don't know the details of Mr. Long's legal foundation. Possibly there were some serious weaknesses in his foundation, which led to his prosecution. Of course, it's also likely that he was prosecuted mainly because of the stupidity and incompetence of the government officials concerned.

It's also clear that the prosecution was caught flat-footed, with their pants down. The defense strategy completely outwitted them. They had no answers and couldn't contest any of the evidence relating to the nature of the income tax and who is liable for it. They must have appeared like bungling idiots to the jury.

It's important to realize that the power of the freedom-violators is bogus. People like Lloyd Long and Larry Becraft have the ability to blow away that bogus power - as they did in this case. Every individual has this ability and power. It starts with assuming personal responsibility. It grows as you educate yourself. It comes to fruition when you develop the means to say "NO!" to the system. You, personally, have to do it. Don't expect the politicians to do it for you.

Politicians have a clearly vested interest in maintaining the "status quo" to their advantage. They are generally known to be skillful liars and makers of broken promises. Be true to yourself. Take your personal power back from the politicians and bureaucrats.

Act on that personal power that is yours and yours alone.

RONALD REAGAN ON THE INCOME TAX SYSTEM
The following article appeared in the Albuquerque Journal of May 31, 1985:
"Reagan Urges 'Rebellion' On Taxes, Government
WILLIAMSBURG, VA. President Reagan, promoting his new tax plan on the 22Oth anniversary of a revolutionary speech here by Patrick Henry, urged "rebellion" against Washington Thursday and expressed sympathy for the "cult of cheating" among American taxpayers.

"It's not considered bad behavior," Reagan said of tax cheating and referring to modern American morals. "After all, goes this thinking, what's immoral about cheating a system that is itself a cheat? That isn't a sin, it's a duty.

"Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive. It has earned a rebellion. And it's time we rebelled."

The outdoor crowd of several thousand, assembled on a sunny, picture-postcard day, erupted into cheers and applause as the president issued his now-familiar call for "a second American revolution."

In Williamsburg, Reagan seemed to equate his own campaign for tax simplification with the revolutionary cause of Patrick Henry, who on May 30, 1765, dramatically stood in the Virginia House of Burgesses and demanded repeal of the Stamp Act that recently had been imposed on colonists by their mother country England.

Henry's call for "tax reform" prompted immediate cries of "treason," but his speech fueled a revolutionary fervor that culminated 13 months later in the Declaration of Independence.

Speaking on the steps of the colonial capitol where Henry had orated, Reagan said the federal income tax is "so rigged, so unfair, that it corrupts otherwise honest people by encouraging them to cheat.... The current system just doesn't work anymore. The underground economy and the cult of cheating prove this is so."

Reagan recalled that the Founding Fathers argued, "Why should the fruits of our labors go to the crown across the sea?" He added, "in the same sense, we ask today, why should the fruits of our labors go to the capital across the (Potomac) river?"

The president declared, "Now is the time, in short, to get the federal government off our backs and out of our way."

Attacking both Washington and the income tax as symbols of each other will be a key feature of Reagan's strategy for selling his tax plan, particularly when he travels to middle class, family-oriented communities.

Leaving the ghost of Patrick Henry, Reagan flew later to the Main Street world of Sinclair Lewis in Oshkosh, Wis..

Speaking at the Winnebago County Courthouse Reagan asked: "Do the people of Oshkosh want our tax system to be complicated and unfair?"

"No," came the shouted reply.

The president asserted: "the answers are just the same every place I know of except for one city - Washington, D.C. Sometimes folks back there are a little slow to catch on. I may need some help.""

SOURCES
Suppose you pay $10,000 a year on taxes. Suppose by informing yourself you could discover how to legally stop paying those taxes. How much work are you willing to do for $10,000? How much time are you willing to spend to save an extra $10,000? How much money are you willing to spend in order to save $10,000?

The U.S. v. Long Transcript plus exhibits of about 600 pages is available from Lloyd Long, 5048 Roarks Cove Rd, Decherd, Tennessee, PZ 37324/TDC; phone (615) 967-1402. The price is $250 plus shipping.

Larry Becraft can be contacted at 209 Lincoln St, Huntsville, AL 35801; phone (205) 533-2535.

POST SCRIPT
I recently received the following press release:
"IMMEDIATE PRESS RELEASE
Friday, March 4, 1994, Judge David Hagen, of the Federal District Court in Reno, Nevada, issued a Declaratory Judgement that:

16th Amendment was and is invalid;
Federal Reserve Act of 1913 is declared unconstitutional as it was and is applied to State Citizens;
Cold Reserve Act of 1934 to be fraud on its surface and to be declared unconstitutional; and
Title 26 USC (Internal Revenue Code) to apply only to the Federal United States (not to the Citizens of the fifty States), and all other implications to be fraud and declared unconstitutional,
The case is known as:
Ronald L. Jackson vs. United States, et. al. Case # CV-N-93-401-DWH.

However, as of yesterday, March 9th, the Ninth Circuit Court of San Francisco has placed a federal gag order on Ronald Jackson and all parties involved with the case."

[Late Addition: One of our customers has just sent me the docket of the above case. It seems that no declaratory judgement has been passed. It's also unclear if there really is such a gag order.]

A CALL TO ACTION
There is no "gag order" on you. You may study, use, and spread this vital information. As Ronald Reagan implies, it is a duty to "just say 'no'." You owe this duty, not to broken-promise, lying politicians and bureaucrats, but to yourself.

Look within yourself and know that you are FREE! Take back your personal power. Take back that power in the area of taxes. Do all the research you believe is necessary. If, as a result of that research, you make certain discoveries about your "legal duties," then perhaps in good faith you might determine what your proper actions should be.

You may determine that the best and most moral action for you is to just say 'no' to lying politicians and bureaucrats. Just say 'yes' to your personal power and individual sovereignty.

Other reports in this series: #TL16 #TL16A #TL16B #TL16C #TL16D #TL16E #TL16F #TL16G #TL16H #TL16I

posted December 03, 2013 11:24 PM            

If it were me, I would show up at the Administrative summons even if not signed by a judge, and just ask the same two questions I would have asked at the audit. Then if they do get a judge, we get to compromise before it goes to District Court. My compromise would be to produce specific records to substantiate any particular deduction legitimately in question, but not to allow a cursory examination (unlawful fishing expedition) of my books and records. It must really eat at you that a summons isn't enforceable. You were so shocked. And you hate it. Why? Because you are so adamant about defending the status quo. The Supreme Court is the final say on the issue. And the IRS website confirms it. Yet you still can't believe it. You know an idiot's blog saying there are penalties to not complying with an Administrative summons is sheer hogwash and that his wraped opinion doesn't supersede the Supreme Court, yet you still post that nonsense. The Supreme Court case below also confirms that judges tend to lean toward NOT siding with the IRS with a summons, countering your earlier weak argument, as well. If it is our right (defined by both law and the courts, not to mention the IRS internal policies) to refuse to allow the IRS to rummage through our books and records with no respect for the Fourth and Fifth Amendments, then why do you support that they can? Are you a communist? Do you support all police unlawful coercion? You speak about the law so much, well this is the law. Why are you opposed to us doing what the law says we can? Here it is in black and white in case you need to see it:

Substantial protection is afforded by the provision that an Internal Revenue Service summons can be enforced only by the courts. 26 U.S.C. 7604 (b); Reisman v. Caplin, 375 U.S. 440 (1964). Once a summons is challenged it must be scrutinized by a court to determine whether it seeks information relevant to a legitimate investigative purpose and is not meant "to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation." United States v. Powell, supra, at 58. The cases show that the federal courts have taken seriously their obligation to apply this standard to fit particular situations, either by refusing enforcement or narrowing the scope of the summons. See, e. g., United States v. Matras, 487 F.2d 1271 (CA8 1973); United States v. Theodore, 479 F.2d 749, 755 (CA4 1973); United States v. Pritchard, 438 F.2d 969 (CA5 1971); United States v. Dauphin Deposit Trust [420 U.S. 141, 147] Co., 385 F.2d 129 (CA3 1967). Indeed, the District Judge in this case viewed the demands of the summons as too broad and carefully narrowed them.