Pete Hendrickson on whether the IRS is targetting CTC

[fortinbras]

"Tax Researcher" at Lost Horizons has collected those $5000 penalties by the simple expedient of, first, refusing to file annual tax returns, then filing but stalling on a pay plan, then, following the instructions of Cracking The Code. And he is surprised that the case went against him!

TaxResearcher
Joined: 02 May 2008
Posts: 12
Location: New England

PostPosted: Fri May 09, 2008 9:55 am Post subject: Comments please on my situation? Reply with quote

Hello. I am looking for some insight from others.

Here is my situation:

Previously unfiled for 2000, 2001, 2002, and 2003. Position taken was the 16th amendment – ‘show me the law.’ Never heard from the IRS for countless years – until about 2005, when they started asking about where are my returns. I continued with the iine ‘I will pay once you can prove to me what law requires me to pay. Well, another 12-18 months went by before they finally responded – simply saying my position was frivolous and already rejected by the courts.

More time passed and they filed SFRs on me for all years.

I hired an attorney to help set up a payment plan. I got returns filed for all 4 years – the ‘traditional’ way. Mostly W2 but some 1099, also. The attorney burned through $3500 of my money and I got absolutely nowhere with the IRS.

I read CTC, absorbed it, and finally got the guts to file 1040X and 4852 for each year – 2000, 2001, 2002, 2003, and also 2004 – on March 31, 2008. I have not heard anything on these yet.

Currently in the process of going through a CDP (Collections Due Process) hearing – via correspondence. Trying to get a stay of execution from potential liens and levy’s. As I understand it, the levy is not to hard to hold off as long as I negotiate a payment plan but the lien on the house is another story.
My CDP arguments are as follows: (1) Section 6331 of the IRC does not provide authority to levy wages of private citizens in the private sector. (2) I have requested an abatement of penalties for ‘reasonable cause’ because I had an opinion from an actual attorney that he felt there was no law requiring me to file way back when.

I did receive a letter back from appeals regarding my CDP. Basically stating that the issues I raise in my CDP request are those that courts have determined are frivolous or appeals does not consider. The letter writer never explained WHICH issues she was referencing.

My hope was that the amended returns would be processed and eliminate ‘tax liability’ prior to the CDP hearing hitting a head. As I am now reading in the forums that it could take up to 6 months before I even receive a ‘frivolous’ letter, it does not appear that this will work out.

In separate communications, I have twice requested a complete photocopy of the record or any and all assessments in regards to this Notice of Intent to Levy and the original Form 1040 return I filed for TY2000-2003, which shall include all the documents used in making the assessments of tax, penalties and interest with the signature of the assessment officer on the summary record of assessments – pursuant to IRC S6203 and 26CFRS301.6203-1. I have yet to receive even an acknowledgement of this request.

My questions are as follows:

(1) How do I proceed in my CDP? It seems I am doomed to failure with this approach. Should I provide them with the information they are requesting regarding a payment plan?

(2) How can they even threaten a proposed levy and lien action – when it doesn’t even apply to me? What can I do to squash this threat?

(3) As I just at the whim of the IRS as to when (and if) they choose to process my 1040x returns? If they never do, then I have a $63,000 tax bill that keeps growing, with the threat of a lien/levy over my head.

(4) Once I lose in CDP, does it even make sense to go to tax court? From what I am reading in the forums, it doesn’t seem like anybody is having much success except those that the IRS just sends checks to.

Any thoughts are appreciated. I am starting to get a little shaky in the knees with all of this.
Thanks

[.]

two $5,000 penalties - and the third one is probably on its way to me

I read CTC, absorbed it, and finally got the guts to file 1040X and 4852 for each year – 2000, 2001, 2002, 2003, and also 2004

Buy book for $24.95.

Disengage mind.

Wind up with $25K in frivolous penalties, still owing the true amount of tax due for 5 years, perhaps civil fraud and other penalties on the amount of tax due, interest on the whole pile, liens, levies and the possibility of prosecution and attendant need to pay a criminal defense lawyer.

Financial Darwinism at its absolute finest.

[ASITStands]

Did anyone read the latest Lost Horizons Newsletter?

Starting on page 2, Hendrickson posts what's being considered a "huge release" on the subject of frivolous penalties. Apparently, Judge Dianne Kroupa ordered the abatement of several $500 frivolous penalties imposed under IRC 6702 on a notice of federal tax lien.

Neither the docket nor the Petitioner is revealed. Inquiring minds want to know.

Where's the little birdies when you need them?

[LaVidaRoja]

I just checked all of the decisions Judge Kroupa has issued in 2008. NONE regarding a frivolous filing penalty.

Additionally, if a judge finds that the IRS did not afford due process in a lien hearing, isn't the remedy remanding so that the IRS can re-do it correctly? I didn't think the judge has the legal authority to abate the assessment.

Please, correct me if I am wrong

[ASITStands]

The scanned documents show Judge Kroupa signing the Decision, August 22, 2008.

The stipulated decision was signed August 19 by an attorney out of Portland, OR.

The notice of federal tax lien came out of Idaho [by the (202) area code].

The initials of the Petitioner are "K" and "W"

I'm sure you know all that. It just doesn't seem to me it should be too hard to find.

The only thing I can find on the tax court website are memorandums and opinions. There's not enough information to look for a docket and no way of limiting the date for a decision.

I've tried "Williams" and "Wilson" and "Wong" with "OR" with no luck.

The case was obviously a petition for lien action, and it's obvious from the decision, the penalties under IRC 6702 were not sustained. It's also obvious those were the only issue.

[ClobberroTestii]

I searched for opinions using the following date: 08/**/08 and the judge's name. Here's what I found: http://www.ustaxcourt.gov/InOpHistoric/ ... CM.WPD.pdf But that's the closest I can come to KW

[Quixote]

I just checked all of the decisions Judge Kroupa has issued in 2008. NONE regarding a frivolous filing penalty.

Additionally, if a judge finds that the IRS did not afford due process in a lien hearing, isn't the remedy remanding so that the IRS can re-do it correctly? I didn't think the judge has the legal authority to abate the assessment.

Please, correct me if I am wrong

The judge only reversed the CDP determination. IRS agreed to abate the penalties because KW did not file frivolous returns. According to PH's commentary, SFR returns had been prepared for 1998-2003. I suspect that KW's clearly frivolous (if the 2001 1040 is any indication) submissions for 1998 - 2003 were not "returns" and the IRS threw in the 2004 abatement out of pity.

[LaVidaRoja]

I suspect that the decision has not yet been officially ENTERED. That's why it cannot be found on the Tax Court web site. Without looking at the Tax Court rules, does anyone know off-hand how long between a judge signing a decision and the official entry?

[Nikki]

if it was a stipulated decision, it won't appear on the web site.

Only actual Judges' "opinions" are posted.

[Famspear]

More rumblings from users at losthorizons who are questioning the effectiveness of Pete Hendrickson's scam......

A user called "mike" wrote, on 4 October 2008:

I to [sic] would like to know if anyone has won a 3176 battle? I have read this entire thread. I have read several very well crafted letters asking the how and why questions. Making statements affirming their earlier filed documents as correct and refusing to have their testimony suborned. But like one of the last posters here, will those of you who have taken on this battle give us a current update of your battle, victory , defeats or setbacks. My son was issued a 3176 letter and gave a 10 page response, to date has not heard a single word form the IRS. So far over 90 days.

(bolding added)

from
http://www.losthorizons.com/phpBB/viewt ... &start=270

User "Fly2eat" (i.e., Mr. Lochland Jeffries - remember him?) responds, on 15 October 2008:

I'm with Mike, it would be nice to hear someone on this forum who has successfully navigated this course. We just received 3176SC letters yesterday for timely and accurate filed 1040 and 4852 for 2006 and 2007. I am now at the decision point on which way to go. Bravado, gusto and throwing the code and law at the beast is all well and good, but only if it doesn't eventually result in the same thing anyway.

I posted an earlier entry on this very forum subject about our dealings with this agency over a late filed original return that we then later amended with a 1040x and 4852 for 2001. It took them awhile but they finally sent a NOTL to our bank which immediately froze the amount of assets in our bank account. In spite of all our pleadings and clear presentation of the IRC, specifically the absence of para (a) of IRC sec 6331 in the unsigned letter from the IRS to our bank, they would not budge. We chose to pay that late penalty and get that behind us so we could concentrate on the 3176's we knew would be coming regarding our 06 and 07 years. If you bank at USAA, expect the same if you get to this point. We are now at that point again and it's time to once again fish or cut bait as they say.

We have been down the path of challenging my company in District Court over their reporting to the IRS the money I get in exchange for my labor as wages and income. The plaintiff successfully got the case moved to Federal District Court out State Court when they used the "tax protester" label over and over in their responses to the Courts. I fought hard but lost the case to Summary Judgement and then unfortunately, due to bad advice, missed the time limit to file an appeal and instead filed a "request for redermination". The judge tossed it immediately due to the missed time line. You can see the case at Jeffries v Continental Airlines. I eventually signed an agreement not to bring them back to court over tax issues when they agreed to drop their threat of sanctions. Tough nut to swallow but when you are facing the black robed robber who has already clearly ruled against you, seemingly with glee, it was time to back off and attempt this another way. We are once again faced with a difficult decision and it would be so helpful to see a success from someone else who has gotten the IRS to take any one of these very well thought out letters written by members on this very forum. Anyone?

I have been in phone and email contact with Louis Ewing of who promises he can beat these guys but unfortunately I don't want to be his guniea pig on this issue. He does seem to have quite a handle on the code and some very interesting take on how to navigate getting out of the system. Anyone had any experience with this guy?

I am trying to prevent what happened to these folks to us.
http://www.usdoj.gov/tax/Dowling_Complaint.pdf
http://www.usdoj.gov/tax/Golson_Complaint.pdf
http://www.usdoj.gov/tax/Gerstenkorn_Complaint.pdf
http://www.usdoj.gov/tax/Spitzer_Complaint.pdf
http://www.usdoj.gov/tax/Artman_Complaint.pdf

These are the only cases I can find so far, I'm guessing there are a few more out there. I asked Pete about them and he said they rolled over when the DOJ came after them. This was his reply:

The cases you reference are the only such cases, L.D., and they are all inter-related, and also all dramatically mischaracterized by the DOJ. See http://www.losthorizons.com/PostNewWitnessTampering.pdf for the facts about these cases and the overall reality that the DOJ doesn't go into in its press releases. Read it slowly and thoroughly.
-Pete

(bolding added). I don't recall the name "Louis Ewing." Obviously, it's close to blasphemy for a user posting at losthorizons to suggest that the dolts over there should consider using any theories other than those of PeterEricBlowhardMeister Hendrickson.

Then, user "TaxResearcher" chimes in:

Fly2Eat,

As someone else from NH, I agree with your assessment. I have been unable to find one person on these forums who has successfully taken these issues to conclusion. Unless I can see a light (even a dim one) at the end of the tunnel, I will be forced to just pay up. I am not, nor do I have any interest, in learning all the intricacies of the legal system just so that I can have some IRS attorney run all over me - and end up owing more with sanctions and what not.

It seems like even though I check this forum consistently, each one of us is all alone to try to tame the beast. I, for one, don't know what my next step should be.

(bolding added).

In other words: Pete Hendrickson's Cracking the Code scam does not work when you actually try to use it.

[Quixote]

I am trying to prevent what happened to these folks to us.
http://www.usdoj.gov/tax/Dowling_Complaint.pdf
http://www.usdoj.gov/tax/Golson_Complaint.pdf
http://www.usdoj.gov/tax/Gerstenkorn_Complaint.pdf
http://www.usdoj.gov/tax/Spitzer_Complaint.pdf
http://www.usdoj.gov/tax/Artman_Complaint.pdf

If Fly2eat had been paying closer attention, he might realize that what happened to those folks is nothing compared to what most CTC worriers are facing. Those people only had to repay the fraudulantly obtained refunds. Most CTC worriers will repay the refunds and be hit with $5,000 penalties. Although the 5 might be subject to the $5,000 frivolous return penalty, I doubt it has been asserted against any of them.

Of course, if Fly2eat had better reading skills, he might realize that the way to avoid the whole problem would be to file accurate returns instead of CTC gibberish.

[.]

a late filed original return that we then later amended with a 1040x and 4852

4852 for 2006 and 2007

The 2001 fire wasn't hot enough, so file more CID-bait. Yeah, that'll work.

[Famspear]

Although the 5 might be subject to the $5,000 frivolous return penalty, I doubt it has been asserted against any of them.

All the five listed cases involved positions taken prior to March 16, 2007, so the applicable section 6702 penalty would have been the old $500 penalty, rather than the new $5,000 penalty. I know that the $500 penalty was asserted against Dowling.

[ASITStands]

Anyone know about this?



Read the text starting here at EVERY WHICH WAY BUT LOOSE- XIII.

[Nikki]

I love how Pete posts all of his suck<<<<readers' victories and correspondence with all the identifying details. It makes the referral to CID and Special Fraud Unit so much easier.

[Judge Roy Bean]

I wonder if the recipient realizes that's about as good as a "you've won the lottery" letter from Nigeria.

[fortinbras]

I love how Pete posts all of his suck<<<<readers' victories and correspondence with all the identifying details. It makes the referral to CID and Special Fraud Unit so much easier.

And are you claiming the usual IRS bounty for turning them in??

[Nikki]

The bounty only applies to cases where there has been (1) a successful conclusion and (2) the information was otherwise unavailable to the IRS.

When someone posts their tax evasion exploits on the Internet, the second condition doesn't apply -- even though the IRS doesn't yet have an appropriate program to glean these low-hanging fruit from the Internet.

[The Observer]

And (3) the bounty is based on how much the IRS is actually able to collect - not just assess.

[Famspear]

Let's review now:

http://www.usdoj.gov/tax/Dowling_Complaint.pdf

http://www.usdoj.gov/tax/Golson_Complaint.pdf

http://www.usdoj.gov/tax/Gerstenkorn_Complaint.pdf

http://www.usdoj.gov/tax/Spitzer_Complaint.pdf

http://www.usdoj.gov/tax/Artman_Complaint.pdf

Also, Andrew D. Scott was socked with a $20,000 penalty (June 4, 2008 oral findings of fact and opinion, Tax Court case no. 26392-06), plus other penalties and of course the taxes.

Gregory J. Williams, who runs the web site "taxfool.net" and who went for a guilty plea, may have followed Cracking the Code to some degree. U.S. District Court, Eastern District of Tennessee (case 1:08-cr-00064)

And Roger Charles Menner was found guilty, October 23, 2008, in the U.S. District Court for the Eastern District of Virginia (although it's unclear to what extent he followed Pete Hendrickson's Cracking the Code; Pete, of course, says Menner did not follow the book).

Examples of users apparently disgruntled (in varying degrees) at Pete's web site, losthorizons:

CW
TaxResearcher
mike
Fly2eat (screen name for Lochland Jeffries).

All is not well, and the lost horizon is cloudy, in lost losers land......