A Hendrickson follower indicted on federal tax charges?

[Dr. Caligari]

The Income Tax is an excise; it does not tax all labor. One may avoid that excise by avoiding the activity/property that produces "income."

Lorne, what is [your] definition of "income"? What "activity/property" produces income? And, my most important question, what Supreme Court decision says so?

[Famspear]

I agree with the ruling. That argument is without merit because not all money earned is "income" under the tax laws.

All money earned is indeed "income" under the tax laws unless specifically excluded by statute, such as Code sections 101 through 140.

The Income Tax is an excise; it does not tax all labor.

The income tax has been variously characterized as an excise (indirect tax) or, in a few cases (even after 1913) as a "direct" tax. Either way, the characterization of the U.S. federal income tax as direct or indirect is legally irrelevant to its validity as far as the apportionment rule is concerned.

One may avoid that excise by avoiding the activity/property that produces "income."

That's more or less correct as stated -- but I suspect that you don't really understand what you are saying -- i.e., that you might be implying something that is false.

You can avoid liability for federal income tax simply by avoiding realizing income. If I don't work and don't get paid, I can't realize income from getting paid for working, by definition. In such a case, I have no income (at least not from "working"), and therefore no federal income tax liability for income that I have not realized.

There is NO REQUIREMENT WHATSOEVER that the federal income tax be tied to an "activity" in connection with a "federal privilege." In fact, there is no requirement (constitutional, statutory, common law, regulatory, or otherwise) that the federal income tax be tied to any "activity" at all.

Lorax, the DeathCare Reform Act is not unconstitutional. Fortunately, it doesn't apply to me as I'm not engaged in interstate commerce, I am not a party to it, nor do I desire any of FedCorp's "general welfare" - thank you just the same.

You are engaged in interstate commerce. Trust me. And the "DeathCare Reform Act" as you put it, does apply to you. Trust me.

You're not a "party" to the Act. I'm not a "party" to the Act. You're using meaningless gibberish. And whether you and I "desire" the "general welfare" is probably beside the point of the legality of the Act.

There is no such thing as the "FedCorp." The federal government is not a "corporation" in the sense in which you are using the term. You are reading too much tax protester literature.

[Cpt Banjo]

the DeathCare Reform Act is not unconstitutional.

The individual mandate portion of it may very well be.

[LOBO]

I'm beginning to think that he's not really an accountant..

[Lorax]

Good luck with that argument in court Lorne.

As for the individual mandate being unconstitutional, I disagree, though it's certainly a possibility that the five justice conservative majority will rule that it is. Such a ruling would likely require them to throw out the interpretation of the commerce clause that has been settled law since the New Deal, with far reaching, and in my opinion, devastating consequences. Perhaps it's wishful thinking on my part, but I doubt that Justice Kennedy would want to cross that bridge.

[The Operative]

I'm beginning to think that he's not really an accountant..

There are accountants that have Bachelor's degrees or higher and many have additional designations such as CPA, CPA/PFS, CFP, CISA, etc. These are the true professional accountants that will typically know what they are talking about.

Then, there are "accountants" that may not have anything above a high school diploma or Associate's degree. Typical work for them is processing mundane transactions in accounts payable or accounts receivable departments. Sometimes, they will branch out into basic tax preparation business. Some of these "accountants" might be very good and make few errors. Others, probably wouldn't know what might be deductible unless TurboTax told them about it.

[Famspear]

.....Then, there are "accountants" that may not have anything above a high school diploma or Associate's degree. Typical work for them is processing mundane transactions in accounts payable or accounts receivable departments. Sometimes, they will branch out into basic tax preparation business......

It will soon be harder for some people to break into the federal tax return preparation business, or even to continue in that business. The U.S. Treasury is now working on a regulatory system whereby anyone who is not a CPA, an attorney, or an enrolled agent will have to pass an IRS examination in order to continue in the business of federal tax return preparation. This will be a national system. There will also be continuing education requirements (the education requirements also will not apply to CPAs, attorneys and enrolled agents, as they already have continuing education systems).

And I believe the definition of "practice before the Internal Revenue Service" will be changed to include tax return preparation. Up to now, the term has not included tax return preparation -- just things like representing taxpayers in IRS examinations, IRS collections actions, and so on.

The IRS will require that everyone who wants to continue in the federal tax prep business (or to enter the field) will have to obtain a PTIN, a practitioner tax ID number. Those who already have a PTIN (myself included) will have to re-register with the IRS (which can be done on the IRS web site). At some point, IRS will no longer allow practitioners to use the social security number as a practitioner number.

The new rules will reportedly require that all federal tax return preparers register and obtain a PTIN (and pass the IRS exam if the practitioner isn't a CPA, attorney, or enrolled agent) -- even preparers who are not signing the tax return.

Scenario: In the typical CPA firm of any substantial size, you as the staff accountant prepare the return and your superviser reviews it, writes a couple of points. You clear the points, he or she finalizes the return and signs it. Even though you're not the SIGNING preparer, you will still be "a" preparer under the new rules, and you'll have to go through the same IRS regulatory hoops as everyone else.

The details are still being worked out by the IRS. I suspect, however, that the IRS examination requirements are going to make it more difficult for Eddie's Corner Tax Service and School of Bartending to continue in the business.

EDIT: Since this is off-topic, I've started a thread on this under the Tax Practice and Policy area of the Quatloos forum.

[lorne]

The "edit" in Harvester's post was done by Harvester himself. He's trying to make it look like ..

Harvey, is that true? youre self-moderating - that is too funny! What would you have put in there?

Although I deal with lots of numbers and records, no, I'm not an accountant and have no related degrees. I just have an eye for detail and what started with helping family /friends with tax forms grew into a little business.

There is no such thing as the "FedCorp." The federal government is not a "corporation" in the sense in which you are using the term.

So you admit it's a corporation in another sense.

Lorne, what is [your] definition of "income"? What "activity/property" produces income? And, my most important question, what Supreme Court decision says so?

Well that is the heart of whole matter isn't it. I'm not certain we have the time or space necessary here, on an internet forum, to adequately address this issue, but I don't believe the answer lies in the direction Famspear is leading. There is a definite difference between direct and indirect taxation and that difference is not irrelevant to the Income Tax. And further than statutory exemptions, some income is exempt from taxation by fundamental law, that is to say, the Constitution. At any rate, the answers are contained in the books you choose not to read.

[Famspear]

There is no such thing as the "FedCorp." The federal government is not a "corporation" in the sense in which you are using the term.

So you admit it's a corporation in another sense.

No. I don't "admit that the federal government is a corporation "in another sense." If this stuff is too hard for you, just say so.

There is a definite difference between direct and indirect taxation and that difference is not irrelevant to the Income Tax.

No. The only possible relevancy of the direct tax/indirect tax dichotomy has to do with the requirement for geographical uniformity. Indirect taxes must be applied with geographic uniformity. There is no such requirement for direct taxes.

And further than statutory exemptions, some income is exempt from taxation by fundamental law, that is to say, the Constitution.

No. There is no income that is exempt under fundamental law, or under the Constitution.

And no, the answers are not contained in the books we "choose not to read." The answers are obtained by performing formal legal analysis. Formal legal analysis involves a set of rules and procedures which you have not mastered, Lorne.

[Gregg]

I'm beginning to think that he's not really an accountant..

Ya think?

[notorial dissent]

I'm beginning to think that he's not really an accountant..

And your first clue was?????????????

At this juncture I'm quite sure I wouldn't want him either cleaning my pool, if I had one, or mowing my grass, since he doesn't seem competent to do either.

[silversopp]

Yet another person with absolutely no education, training, or real world experience in tax law believes that he has figured out what everyone with education, training, and decades of experience have been missing for almost 100 years. Even more impressive, Lorne has reached this conclusion without using the text of the law itself or any opinion of the courts.

How do you honestly believe that you're correct? How can you honestly believe that all the tax professionals are wrong, that the courts are wrong, and that the Congressmen who wrote the law are also wrong about what it means? Seriously...how can you swallow this tax protester crap?

[Gregg]

Yet another person with absolutely no education, training, or real world experience in tax law believes that he has figured out what everyone with education, training, and decades of experience have been missing for almost 100 years. Even more impressive, Lorne has reached this conclusion without using the text of the law itself or any opinion of the courts.

How do you honestly believe that you're correct? How can you honestly believe that all the tax professionals are wrong, that the courts are wrong, and that the Congressmen who wrote the law are also wrong about what it means? Seriously...how can you swallow this tax protester crap?

Because after many years as a tax professional, one of his clients brought it up, and gave him a copy of Cracking the Code..... and then he understood the truth!

Hello, I have a client who let his Quickbooks subscription expire (or maybe deactivated it, not sure) and it now withholds no federal from his employees payroll checks. but it does calculate and withhold the corect SS and Medicare amounts. He seems to like it this way, more $ for workers, and from his talk I gather he's been reading some of patriot stuff.

I'm trying to talk some sense into him - that he is responsible for the correct amount of fed withheld according to W4 regardless of software. Sent him IRS and Tax Protester FAQ links but not sure. Thinks he can just blame the program. Long-time client and I don't want to push to hard and lose him.

TIA, Lorne

within a few posts, he was hooked

Yes, he said it did give warnings but no warnings now. As I understand it, his version is old and it wants him to buy the newest ver. which wont run on his old computer/OS. So you're saying both he and employees (who did nothing wrong) will be in hot water - employees get interest & penalties for underwithholding, and same for him with possible crim. charges added like Richard Simkanin. I will look him up.
Meanwhile, He's given me 2 books by Ron Weston and Peter Henderson, who I see was just convicted.

thanks, Lorne

No I won't be signing his returns until I can bring him around. Today we had a nice little chat or negotiation as it were. Told him of the dangerous path he was on, yada, yada - that I will put my objections in writing unless... No problem, he says, just read the books to see where Im coming from. Well I agreed to read one of them just to be charitable.

thanks, Lorne

starting to go full retard here

Well this Henderson book is holding my interest at least. Some of this tax history is new. But this legalese definitions I dont know - it's been said lawyers speak 2 languages - english and lawyerspeak. Im no lawyer but I do know my way around the tax code. One thing thats always bothered me, the complexity & obtuseness of the code. I know the code is based on legislation; thats where it comes from. Now why can't they write a simple straightforward bill? Is that too much to ask? But no, we get these huge thousand-page bills! Healthcare reform, financial reform. Ive heard 2 politicians now (Pelosi and Dodd) say something like "we won't know whats in this bill until its law." What! Excuse me but, what the hell, thats your freaking job! How do these congress people stay in office? And did you see the latest? An Internet 'kill switch' bill from the Senate!! http://www.zdnet.com.au/internet-kill-s ... 303838.htm
Is it just me or is this country, and Washington in particular a bit of a runaway train, about to come off the rails?

mix in a little Van Pelt

I see that you all are very anti-Hendrickson here. Finished this Hendrickson book and I must say he presents a very strong case. It appears to hinge on special definitions, the IRS acting outside its scope and maybe jurisdiction. Congress legislates sometimes for the District of Columbia and sometimes for the nation - how to tell the difference? Need to research this a bit further but, if true, it points to a lot of deception which at this point of the news cycle, would not really surprise me.

BTW, my client closed the corp. and running his new business happy as a clam. Says he shouldve done it long ago. And will pay employees in lawful money i think he said whatever that means.

and within 4 pages, he gives it away that he's a troll

wow, thought my opinion wouldn't be well received here but didn't expect this - odd forum. Look, not trying to pick a fight here, just trying to be fair to all sides. Didn't say he was correct, just that he presents a very strong case.

Yes, much hinges on the INCLUDES argument, which he addresses at length on pages 33 through 37, I won't rehash it here if you have the book. Whats your take on that? Yes “[T]he words of statutes .. should be interpreted where possible in their ordinary, everyday senses.” but where a custom definition is given that definition should rule the statute no? And as I see it, everything is excluded except the list of included items and other things within the same class as the meaning of the term defined.

"And his conclusion makes no sense whatsoever. How could Congress could possible have expected to collect trillions of dollars in tax revenues by taxing only the salaries of government employees?"

well yes, thats the point. The income tax started very slowly, took a long time to reach a trillion. It appears the IRS early on realized, hey wow folks not even liable for this are paying it, we might have something here. You know how scammers can probe and exploit everything? Im reminded of some shopping sites i used to visit. People would tell how to get a good deal - coupons, rebates etc. But then some people really pushed it - advanced techniques where you buy at one store get the rebate & then return the item for full refund at another store i think, I was like wow, that's pushing it, that borders on fraud, I would never do that. Fraud can go both ways, store can bait & switch the consumer or the consumer can scam the store. I mean who is scamming who here?

I see your court/law argument, yes he was convicted. But I also see it took them a long time, they first tried to stop the book sales and failed and then got the filing false document. But what if theres some judicial corruption at play?

My mind isn't made up here, yes there's money at stake for me, not a lot, my other business has eclipsed the prepared returns. Bit of a conundrum for me. Preparing returns for what possibly could largely be a fraud.

Lorne

[Cpt Banjo]

As for the individual mandate being unconstitutional, I disagree, though it's certainly a possibility that the five justice conservative majority will rule that it is. Such a ruling would likely require them to throw out the interpretation of the commerce clause that has been settled law since the New Deal, with far reaching, and in my opinion, devastating consequences. Perhaps it's wishful thinking on my part, but I doubt that Justice Kennedy would want to cross that bridge.

I was thinking in terms of the taxing power, not the commerce clause. It seems that the administration's current litigation strategy is to try to justify the charge for not having health insurance as a tax. As such, it would need to persuade the Court that an excise can be based upon inactivity, an unprecedented claim.

[Harvester]

Yes Lorne, self-edit. What I would have put there probably wouldn't make it past the mods.

Yes, the administration now admits healthcare reform is a tax. While it would be interesting to see the contortions they'd go through to defend it, it will all be moot soon enough. The whole charade will be exposed and the scam will collapse; announcements are imminent.

Krieger! stehe tall

[Duke2Earl]

announcements are imminent.

Oh my. Break out the popcorn and lawn chairs. I think Harvey ought to hold his breath.

[bmielke]

announcements are imminent.

Oh my. Break out the popcorn and lawn chairs. I think Harvey ought to hold his breath.

Do you think I should head home, after all when the chaos erupts I would hate to be fifty miles from home, and illprepared for fighting through the riots that are sure to be in the street.

More importantly would my boss buy this as an excuse?

[Thule]

Krieger! stehe tall

Your German is as flimsy as your grasp of law, politics and the real world.

[Dr. Caligari]

Krieger! stehe tall

Du musst Caligari werden!

[Lorax]

I was thinking in terms of the taxing power, not the commerce clause. It seems that the administration's current litigation strategy is to try to justify the charge for not having health insurance as a tax. As such, it would need to persuade the Court that an excise can be based upon inactivity, an unprecedented claim.

I suppose the idea of taxing people for their failure to do something is unprecedented. If memory serves, taxes should be upheld if there is some reasonable relationship to revenue production, or if Congress has the authority to regulate the activity that is being taxed. Certainly there is a reasonable relationship to revenue production- the OMB is already factoring in the predicted revenue into its projections. Because this test is satisfied you don't have to consider whether Congress has the authority to regulate the inactivity, but let's say we do consider it. There's obviously a tie in here with the commerce clause. Since the (in my opinion wrongly decided) 5-4 decision in Lopez, the standard of what activities Congress can regulate is unclear if not contradictory, and I wouldn't put it past Roberts and the other conservatives to continue in the direction of Lopez, but this shouldn't matter since there is a reasonable relationship to revenue production.