Pete and Doreen may have not filed correct amended returns

[LPC]

It seems like a violation of fundamental rights (First Amendment) and somewhat Orwellian to use contempt to force a person to affirm something that he doesn't agree with simply in order to make tax returns administratively processable by an agency.

But it is less Orwellian to put him in jail for the same thing? Remember, Hendrickson is currently serving prison time for signing and filing tax returns which he claims to believe are true, correct, and complete.

The IRS of course can proceed civilly against the Hendricksons by issuing notices of deficiency. In the event of a court challenge, collateral estoppel (the same arguments were made in the erroneous refund suit) will work in the government's favor.

If the IRS issues a notice of deficiency, Hendrickson would have 90 days to file a petition with the Tax Court.

The Commissioner could then move for summary judgment alleging collateral estoppel (among other things).

After some number of days, or weeks, or months, the Tax Court could rule in favor of the IRS, perhaps even getting sanctions for a frivolous petition.

Hendrickson would then have an appeal period.

If Hendrickson files an appeal, the IRS would then have to wait for the Court of Appeals to deny the appeal before assessing the tax.

If Hendrickson petitions for cert., the IRS would then have to wait for the Supreme Court to deny cert. before assessing the tax.

OR:

If the district court is able to enforce the order it has already issued, and Hendrickson files a correct return, the tax can be assessed immediately.

Which procedure is more efficient? The government wants to enforce the order it already has (and for which appeals have already been denied), and require Hendrickson to file a correct return. You can disagree with the government and say that a different approach would have worked out better (or will work out better), but it's not clear that it would have saved (or will save) anyone any time or effort to issue a notice of deficiency rather than asking for an order to Hendrickson to file correct returns.

As far as the judge's order is concerned, you seem to think it is unreasonable for the government to get the benefit of the litigation it has already won, and reasonable to allow Hendrickson to initiate another round of time-wasting and fruitless litigation. I don't think that the judge has the right to second-guess the IRS and order the IRS to pursue a remedy that is different from the one it has chosen merely because the judge thinks that it *might* be better for the IRS.

[Dr. Caligari]

As far as the judge's order is concerned, you seem to think it is unreasonable for the government to get the benefit of the litigation it has already won, and reasonable to allow Hendrickson to initiate another round of time-wasting and fruitless litigation. I don't think that the judge has the right to second-guess the IRS and order the IRS to pursue a remedy that is different from the one it has chosen merely because the judge thinks that it *might* be better for the IRS.

At this point, the judge has issued his orders and they have been upheld on appeal so yes, the Government is entitled to have those orders enforced.

As an initial matter, had I been the trial judge, I would have rejected the Government's request for this form of injunctive relief on the grounds that it had an adequate remedy at law (a Notice of Deficiency), which should have precluded equitable relief.

[Harvester]

Actually, it's more than that. Under the law, a person is required to file a legally valid return. A return in which the jurat is significantly altered or repudiated often is not a legally valid return. So, the court order wasn't made "simply" in order to make the returns "administratively processable" by the IRS. The IRS probably does not have the legal authority to knowingly process a document as though it were a legally valid return if the document is not a legally valid return. The IRS has to follow the law. The Court "simply" ordered the Hendricksons to comply with the law -- to comply with a duty imposed by a statute.

Well you forgot the qualifier Famspire. Under the law, a person is required to file a legally valid return if they received taxable income. My take is the Hendricksons believed they had no taxable income and the govt failed to prove they did.

Anyone want to see what Santa brought me for Christmas?

[silversopp]

My take is the Hendricksons believed they had no taxable income and the govt failed to prove they did.

Once again, I'll have to point out to Harvester that Pete was convicted. The government proved their case beyond a reasonable doubt. I'm not sure why Harvey keeps pretending that the government didn't win their case. Pete is sitting in prison right now Harvey. Even Pete and Doreen acknowledge that.

Anyone want to see what Santa brought me for Christmas?

Let's play "What Did Santa Not Bring Harvey For Christmas"

1) A Brain

[Pottapaug1938]

Harvester wrote: Under the law, a person is required to file a legally valid return if they received taxable income. My mistake is the Hendricksons believed they had no taxable income and the govt failed to prove they did.

Fixed it for you.

[Pottapaug1938]

My take is the Hendricksons believed they had no taxable income and the govt failed to prove they did.

Once again, I'll have to point out to Harvester that Pete was convicted. The government proved their case beyond a reasonable doubt. I'm not sure why Harvey keeps pretending that the government didn't win their case.

The courts are corrupt, or something....

[Famspear]

While we're on the subject of the Blowhardian Boobs being ordered to file amended returns......

Inevitably taxpayers make good-faith mistakes in preparing their returns, which result in erroneous determinations of the tax due. As a further complication, the errors may impact subsequent years' returns. Upon discovery of an error after a return is filed[,] what are the obligations of the taxpayer to file an amended return to correct the error and what are the obligations of the tax return preparer to so advise? In those cases where the error impacts a subsequent year's return, the additional question arises as to whether the subsequent year's return is determined using the facts as then known to be true?

Legally, taxpayers are required to accurately compute and report their income, deductions, credits and tax liability on a timely filed return. However, there appears to be no authority in the Internal Revenue Code (IRC), the regulations or case law that imposes a legal duty on a taxpayer to file an amended return to correct an error or omission on a return previously filed. This is true regardless of whether the error [or] omission has resulted in an understatement of tax due or whether the statute of limitations is still open with respect to that year.

--Thomas Wechter, J.D., LL.M., "Obligations of Taxpayers and Tax-Return Preparers Regarding Amended Returns," Tax Insider column, Oct. 15, 2009, American Institute of Certified Public Accountants (bolding added), at:

http://www.cpa2biz.com/content/media/PR ... eturns.jsp

Wechter goes on:

In Broadhead v. Commissioner, TC Memo. 1955-328, the Tax Court held that the Treasury Regulations do not require a taxpayer to file an amended return, even after [having been] advised by the taxpayer's accountant to file an amended return....

[ . . . ]

In Badaracco v. Commissioner, 464 U.S. 386 (1984), the Supreme Court implicitly accepted Broadhead while dealing with a limitation period issue and stated that "the Internal Revenue Code does not explicitly provide either for a taxpayer's filing or for the Commissioner's acceptance of an amended return; instead an amended return is a creature of administrative origin and grace." The Supreme Court noted that although the regulations, including Reg. 1.451-1(a) and 1.461-1(a) refer to an amended return, no regulation requires the filing of an amended return.

[ . . . ]

Despite the references to amended returns in the regulations and IRS publications, a taxpayer is under no legal obligation to file an amended return to correct a good faith error in a prior open year. However, the taxpayer cannot take advantage of the error made in prior years in subsequent years. Otherwise the taxpayer will have violated the legal obligation to file a correct and accurate return using the facts and circumstances that are then known to be true....

---Id.

By ordering the Blowhards to file amended returns, is the District Court overstepping?

[Famspear]

Follow-up: Is the order requiring the Hendricksons to file amended returns simply an example of a valid exercise of the Court's power to fashion some reasonable post-judgment remedies in a civil tax case (an erroneous refund case).

[LPC]

Follow-up: Is the order requiring the Hendricksons to file amended returns simply an example of a valid exercise of the Court's power to fashion some reasonable post-judgment remedies in a civil tax case (an erroneous refund case).

There is no obligation to file an amended return when the original return is made in good faith. Hendrickon's returns were knowingly false, so the principle doesn't apply.

Incidentally, I've checked with other lawyers from time to time over the years, and most agree that there is no legal obligation to correct a return filed in good faith. In one discussion of this, another lawyer volunteered a rather interesting story.

After an estate had been distributed, another asset was discovered which had not been listed on the estate tax return. Believing that there was a moral obligation to report the asset even if there was no legal obligation, the lawyer prepared a "supplemental return" (there is no such thing as an "amended" estate tax return, but taxpayers can file "supplemental" returns to claim refunds for additional deductions) and sent it to the IRS along with a check for what was believed to be the additional tax due.

The IRS responded by sending him a letter explaining that they couldn't accept the return or the tax payment because the statute of limitations for assessing the estate tax had passed, and there is nothing in the Internal Revenue Code that allows a taxpayer to waive the statute of limitations for assessing estate tax. (There is a provision allowing taxpayers to waive the statute of limitations on assessing *income* tax, but not estate tax.) The IRS therefore could not assess any additional tax and, without an assessment, they couldn't accept the payment.

The IRS offered him a choice between receiving a refund or making a contribution to the US government. He chose the refund.

[Quixote]

Follow-up: Is the order requiring the Hendricksons to file amended returns simply an example of a valid exercise of the Court's power to fashion some reasonable post-judgment remedies in a civil tax case (an erroneous refund case).

There is no obligation to file an amended return when the original return is made in good faith. Hendrickon's returns were knowingly false, so the principle doesn't apply.

Incidentally, I've checked with other lawyers from time to time over the years, and most agree that there is no legal obligation to correct a return filed in good faith. In one discussion of this, another lawyer volunteered a rather interesting story.

After an estate had been distributed, another asset was discovered which had not been listed on the estate tax return. Believing that there was a moral obligation to report the asset even if there was no legal obligation, the lawyer prepared a "supplemental return" (there is no such thing as an "amended" estate tax return, but taxpayers can file "supplemental" returns to claim refunds for additional deductions) and sent it to the IRS along with a check for what was believed to be the additional tax due.

The IRS responded by sending him a letter explaining that they couldn't accept the return or the tax payment because the statute of limitations for assessing the estate tax had passed, and there is nothing in the Internal Revenue Code that allows a taxpayer to waive the statute of limitations for assessing estate tax. (There is a provision allowing taxpayers to waive the statute of limitations on assessing *income* tax, but not estate tax.) The IRS therefore could not assess any additional tax and, without an assessment, they couldn't accept the payment.

The IRS offered him a choice between receiving a refund or making a contribution to the US government. He chose the refund.

There is case law that I can not put my finger on at the moment that holds that the IRS has no authority to make a refund unless the tax is overpaid. The tax is overpaid only if the payments and credits exceed the proper amount of tax, not just the assessed tax. The estate should have received neither a refund, nor the option to make a (tax deductable) contribution to reduce the public debt. However, the Internal Revenue Manual is so badly written that an IRS employees could easily find support for the the result above.

[Dezcad]

By ordering the Blowhards to file amended returns, is the District Court overstepping?

In the response to the Blowhard's Motion to Vacate, the US has stated its position on this as follows:

The Defendants ignore the fact that, in addition to seeking to recover the erroneous
refund, the complaint also sought injunctive relief against the Defendants under 26 U.S.C. §
7402(a), which authorizes a district court to issue orders of injunction as may be necessary or
appropriate for the enforcement of the internal revenue laws, a remedy that, by its own term, is
“in addition to and not exclusive of any and all other remedies of the United States” to enforce
federal tax laws. The complaint requested that the Court require the Defendants to file amended returns for 2002 and 2003 and enjoin the Defendants “from filing false or fraudulent claims, forms, or returns with the IRS in the future, including claims, forms, and returns based on the false statements about the federal tax laws described in the complaint.” (Docket no. 1.) Based on its findings, the Court properly granted this relief. The Defendants argue that other remedies may be available to the IRS to correct the Defendants’ incorrectly reported 2002 and 2003 tax liabilities. However, § 7402(a) provides an adequate and proper remedy which the United States sought and the Court found appropriate. Thus, the Defendants’ argument that the United States somehow perpetrated a fraud on the court by seeking and obtaining such relief is meritless.

There appears to be clear statutory authority for what the USDC did.

[ArthurWankspittle]

Follow-up: Is the order requiring the Hendricksons to file amended returns simply an example of a valid exercise of the Court's power to fashion some reasonable post-judgment remedies in a civil tax case (an erroneous refund case).

There is no obligation to file an amended return when the original return is made in good faith. Hendrickon's returns were knowingly false, so the principle doesn't apply....

Can someone explain this to me, please? If Hendrickson hasn't filed a valid return, why is he being asked to file an amended return or is this a date dependant technicality? i.e. If I filed an invalid return for 2009, I don't file another "return", I file an "amended return" even though there was never a valid original "return" to amend; but that can retrospectively correct the original "return" and make it valid.

[LPC]

Doreen filed some sort of affidavit on Friday, with two Forms 1040x attached in her name alone.

I haven't finished reading the affidavit, so I'm not sure what the point is, but I've posted a copy here.

My favorite part so far:

10. As soon as I began reading my statement into the record [on December 15th], Judge Edmunds covered her face with her hands, sighed, rolled her eyes, and during my testimony sat with her head in her hand and elbow on her bench, appearing to be bored and annoyed.

[LPC]

10. As soon as I began reading my statement into the record [on December 15th], Judge Edmunds covered her face with her hands, sighed, rolled her eyes,

I think that the judge committed a serious breach of judicial protocol here. I believe that the proper procedure is to roll your eyes first, then sigh and cover your face with your hands.

[wserra]

I haven't finished reading the affidavit, so I'm not sure what the point is

You'll probably feel exactly the same way after you finish it.

I believe that the proper procedure is to roll your eyes first, then sigh and cover your face with your hands.

Absolutely right. How is the litigant supposed to see your eyes roll if you've covered your face first?

[wserra]

Judge Edmunds then stated in open court, in front of strangers and my children (including my minor son), the threat "you're going to jail"

Shocking! I wonder who brought him there?

[ArthurWankspittle]

10. As soon as I began reading my statement into the record [on December 15th], Judge Edmunds covered her face with her hands, sighed, rolled her eyes,

I think that the judge committed a serious breach of judicial protocol here. I believe that the proper procedure is to roll your eyes first, then sigh and cover your face with your hands.

Isn't there an unwritten concession for female judges listening to female plaintiffs?
AND/OR

10. As soon as I began reading my statement into the record [on December 15th], Judge Edmunds covered her face with her hands, sighed, rolled her eyes,

Ah! But you couldn't have seen her roll her eyes if she had her hands over her face, could you? So, your so called evidence shall be ignored!

[Gregg]

19. I am submitting these "amended" returns with the filing status Married Filing
Separately, and do not speak for my husband nor file returns on his behalf.

Can she do that?

Also, since if I recall she had an income of small amounts relative to Pete's, is this an attempt to weasel out of paying income tax on his income, the logic being he's already in jail, they can fight on and she doesn't have to come up with X amount of money to pay the IRS? (I know, I know, they'll get it, but is that what she's thinking?)

And finally, why the hell dont they just drag her off in irons, lock her in a cell with Elaine Brown and see if they become friends or just reach critical mass of stupid and burst into flames?

[webhick]

14. The judge's words and demeanor, and her shouting, caused me to feel
intimidated, frightened, nervous, confused, depressed and profoundly upset.

Spoken like someone whose parents never yelled at her when she fucked up royally. I wonder if my words and demeanor will profoundly upset this special little snowflake.

[Thule]

Judge Edmunds then stated in open court, in front of strangers and my children (including my minor son), the threat "you're going to jail"

Shocking! I wonder who brought him there?

A judge telling someone that they will be jailed? My oh my, I'm sure the people will rise up now.