Sentencing for Doreen Hendrickson

[Famspear]

To recap, the followers of Peter E. ("Blowhard") Hendrickson's Cracking the Code tax evasion scam who are currently in Federal prison in connection with the use of the scam are who have scored the greatest victory possible....

Yes, His Haughty Hendricksonianness really knows how to teach the Clueless Crackheads to uphold the Rule of Law.....

[Hyrion]

The Federal Bureau of Prisons shows sixty year old Doreen Marie Hendrickson as inmate # 48564-039 at the Alderson Federal Prison Camp near Alderson, West Virginia. Her projected release date has not yet been posted.

From a Google overview it looks not too shabby a place.

If it's as nice "down there" as it appears from overhead, she'll probably go home thinking along the lines "it was a nice summer camp away from home".

[fortinbras]

Among the cases involving Hendrickson is one that very very recently was denied certiorari by the Supreme Court.

US v. Gregory P. Boyd (5th Cir., Dec. 9, 2014) 773 F.3d 637, 114 AFTR2d 6890, 2014 USTC ¶ 50539
https://scholar.google.com/scholar_case ... 1764117048
cert. denied (May 18, 2015) _US_.

Boyd reported zero income on multiple income tax returns (despite IRS letters telling him this wouldn't fly) relying on Cracking The Code's instruction that only earnings paid by the govt were taxable. On trial Boyd brought in Peter Hendrickson, himself, as a defense witness (to at least bolster the pleading that he didn't have a fraudulent intent) --- but Peter Hendrickson double-crossed Boyd, insisting on the witness stand that he never advocated that only govt earnings, not private industry earnings, were taxable. This evidently pissed off the judge, who had no trouble finding in C-the-C and other Hendrickson publications this very instruction. Notwithstanding that, Boyd was convicted of multiple tax crimes and was sentenced to live on the accommodations provided by people who did pay their taxes.

[NYGman]

We have a whole thread on that Boyde case, makes goods reading

viewtopic.php?f=51&t=9680

[noblepa]

Did Doreen ever break down and file legally correct returns, or did she report to prison early? I know that she (through her lawyer) was trying to resist such filings, claiming that to do so would violate her fifth amendment rights. I also know she lost that fight.

If she didn't file correct returns, what can the IRS do to force her to do so? Or does it matter? I assume that they have calculated her tax liability based on information from third parties, such as W-2's, 1099's, etc.

It is my understanding that filing a CTC-inspired return (or any other frivolous return) is considered by the IRS to be no return at all, so failure-to-file penalties (fines, etc.) apply. Are these financial penalties a one-time thing that she can just add to her already sizeable tax bill, or do they continue accruing until a correct return is filed?

[notorial dissent]

Judging by her report date, I would say she hadn't, which means she is still liable for a further contempt charge when she gets out, I believe, since she hasn't actually purged the contempt she was charged with.

[Famspear]

Did Doreen ever break down and file legally correct returns, or did she report to prison early? I know that she (through her lawyer) was trying to resist such filings, claiming that to do so would violate her fifth amendment rights. I also know she lost that fight.

Apparently she has not filed legally correct returns. She chose instead to report to prison on May 15th.

If she didn't file correct returns, what can the IRS do to force her to do so? Or does it matter? I assume that they have calculated her tax liability based on information from third parties, such as W-2's, 1099's, etc.

There is little the IRS can do to force anyone to file a tax return, if (as is the case here) the individual prefers to subject herself to whatever monetary penalties and criminal penalties the government can bring to bear.

It is my understanding that filing a CTC-inspired return (or any other frivolous return) is considered by the IRS to be no return at all, so failure-to-file penalties (fines, etc.) apply. Are these financial penalties a one-time thing that she can just add to her already sizeable tax bill, or do they continue accruing until a correct return is filed?

The failure to timely file penalty and failure to timely pay penalty, combined, eventually "max out" at the point they reach an amount equal to 25% of the amount of the unpaid tax, generally. Interest continues to accrue.

[operabuff]

It is my understanding that filing a CTC-inspired return (or any other frivolous return) is considered by the IRS to be no return at all, so failure-to-file penalties (fines, etc.) apply.

That's not right. The IRS test for whether a document is a valid return for purposes of starting the period of limitation and for avoiding the failure to file penalty is the Beard test that I mentioned in an earlier post on this thread. If the return is on the proper form, completely filled in, signed, doesn't have an altered jurat, or comments attached that suggest the taxpayer is disavowing the validity of the return, then it probably meets the test. I think the problem with Mrs. Hendrickson's return is that last piece of it. I think she probably incorporated comments that suggested that the return was signed under protest and that she doesn't believe that the information on the return is accurate.

One good example of a frivolous return position that didn't invalidate the return were claims for a "reparations credit." See Rev. Rul. 2004-33. The returns showing the credit were valid returns even though the position is one the IRS identifies as frivolous. (Item 14 in Notice 2007-30).

[Famspear]

The Federal Bureau of Prisons has posted a projected release date for Doreen Hendrickson: September 4, 2016.