"Redeeming Lawful Money"

[David Merrill]

He observes that these people don't cite the UCC and then he goes on about "According to the UCC..."

[Pottapaug1938]

If someone is going to invoke the "refused for cause" clause of the UCC, they need to identify which provision that is (and may of them do.

Kestrel then points out that, even if they DO cite the UCC provision, it is useless since "refusal for cause" only deals with negotiable instruments. From the Cornell web site so beloved by someone here, we find:

§ 3-104. NEGOTIABLE INSTRUMENT.

(a) Except as provided in subsections (c) and (d), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.
(b) "Instrument" means a negotiable instrument.
(c) An order that meets all of the requirements of subsection (a), except paragraph (1), and otherwise falls within the definition of "check" in subsection (f) is a negotiable instrument and a check.
(d) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this Article.
(e) An instrument is a "note" if it is a promise and is a "draft" if it is an order. If an instrument falls within the definition of both "note" and "draft," a person entitled to enforce the instrument may treat it as either.
(f) "Check" means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a check even though it is described on its face by another term, such as "money order."
(g) "Cashier's check" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.
(h) "Teller's check" means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.
(i) "Traveler's check" means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term "traveler's check" or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.
(j) "Certificate of deposit" means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

A court order is NOT an unconditional promise or order to pay a fixed amount of money; and thus the whole sovrun UCC house of cards falls of its own weight.

[Kestrel]

A court order is NOT an unconditional promise or order to pay a fixed amount of money; and thus the whole sovrun UCC house of cards falls of its own weight.

Where these fine people seem to be confused is this:

A court issues an order.
The court's order says "you forfeit / will pay / are fined $ XX,XXX, plus judicial interest."
This is an order to pay a fixed amount of money.
Therefore the court's order can be "Refused for Cause."
ZZAAPPP! Wrong!

I'm surprised that our in-residence expert on the redemption of Lawful Money is so confused about the difference between a negotiable instrument and other types of documents. Hopefully this will be enlightening.

For a negotiable instrument to be negotiable, the person originally issuing the instrument is the one making the promise to pay. You can Refuse to accept a negotiable instrument if you have Cause to believe that instrument maker's promise to pay may be no good.

The problem, of course, is that court orders, traffic fines, tax assessments, mortgage default notices, and credit card collection letters are not bearer documents, nor are they promises to pay made by the person or agency issuing the documents. Those documents are all demanding that someone else (other than the document issuer or the bank where he deposits his money) make the payment. Therefore they are NOT negotiable, and the Refusal clause of the UCC (which ONLY deals with Negotiable Instruments) DOES NOT APPLY. You can write "Refused for Cause" in any color ink all day, but your scribble-scrabble is as meaningless as what your dog barfs on it.

For all the good it will do, I don't know why I wasted my time typing this.

[Judge Roy Bean]

...

I'm surprised that our in-residence expert on the redemption of Lawful Money is so confused about the difference between a negotiable instrument and other types of documents. ...

Confused? Not a bit. Delusional and trafficking in misinformation, yes.

[David Merrill]

A court order is NOT an unconditional promise or order to pay a fixed amount of money; and thus the whole sovrun UCC house of cards falls of its own weight.

Where these fine people seem to be confused is this:

A court issues an order.
The court's order says "you forfeit / will pay / are fined $ XX,XXX, plus judicial interest."
This is an order to pay a fixed amount of money.
Therefore the court's order can be "Refused for Cause."
ZZAAPPP! Wrong!

I think it true to say in all states that the tax liability for the state depends on the federal tax liability.

[.]

I think it true to say in all states that the tax liability for the state depends on the federal tax liability.

Yet more obfuscatory nonsense. What a surprise.

1) Your statement is false. States have varying methods of arriving at state income tax liability, none of them are based on federal tax liability. Some states use federal AGI as a starting point. Some states have no income tax at all.

2) Your statement has nothing to do with the efficacy of your UCC "refused for cause" nonsense with regard to a document that's not a promise to pay (by the issuer or anyone else) and isn't negotiable in any case.

Got any more word-salad to offer? That last batch didn't work.

[David Merrill]

I think it true to say in all states that the tax liability for the state depends on the federal tax liability.

Yet more obfuscatory nonsense. What a surprise.

1) Your statement is false. States have varying methods of arriving at state income tax liability, none of them are based on federal tax liability. Some states use federal AGI as a starting point. Some states have no income tax at all.

2) Your statement has nothing to do with the efficacy of your UCC "refused for cause" nonsense with regard to a document that's not a promise to pay (by the issuer or anyone else) and isn't negotiable in any case.

Got any more word-salad to offer? That last batch didn't work.

Then I guess I meant that if one has no federal income tax liability, they have no state income tax liability. One can look around and find examples easily.

Although IRS Form 843 cannot be used for claiming back income tax, it can be used for an abatement of the fee paid for the presumed use of private credit in the form of Federal Reserve Notes that is based on the amount of income denominated thereby, when said presumed use has been consistently rebutted by lawful money being demanded for all transactions per 12 USC 411, with a substantive record of same created as admissible evidence by all related financial institutions in their normal course of business documentation. This IRS Form 843 is a good tool to further expose the unspoken legal foundation of the “income tax” – that it is a legitimate usage fee for the use of the private credit and script of the Federal Reserve System.

[rogfulton]

There, fixed it for you so it's true.

[NYGman]

Then I guess I meant that if one has no federal income tax liability, they have no state income tax liability. One can look around and find examples easily.

Not true. States have their own rules and while they may start with AGI on their forms, they have their own additions and subtractions. If you claim your frivolous negative income other income adjustment for Lawful Money on your Federal Return, and then use this AGI as your base for State, you are claiming a frivolous adjustment on both returns, not just Federal, and can be liable to both the Federal and State governments for underpayment. Why your people claim this as a negative income item, and not an other deduction is curious, as I would think an other deduction would be less suspicious. By presenting it the way I have seen it presented in your aledged "proof" really draws attention to the issue, hopefully making it easier for the IRS to find. While teh way states audit is not the same as the IRS, if the IRS does catch on, which they will do, if the amounts are high enough, I believe they will report the audit adjustment to the state, who will then have the option to assess.

On this point, I should add you do not seem to grasp the way the IRS processes returns and refunds. They typically accept what is filed, and send the refund requested. Especially in today’s efile age. As long as tehre are no obvious errors, and outlandish claims (Even this can sometimes be overlooked) the IRS will pay the refund asked for. It is only later, when they fully process the return, that it may get picked up for audit, which depends on many factors. It is true that the IRS may never catch all of these claims, and someone may get away with this for a long time, but ultimately it is not validation that the position is accepted. It probably means the return was within tolerances, or the amount is to small to be worth while.

I do believe most people who follow these theories don't really have enough income to make much of an impact, or get noticed. I also believe those who follow these theories don't understand what they are doing or the consequences. I first started following TP issues when I was involved in the VITA program. I would prepare free tax returns for people who needed assistance. I would prepare them within the law, but I would have people tell me their friends paid someone to prepare and they got a huge refund. These people were abused by unscrupulous tax preparers who would take frivolous positions, and while they would get refunds, they would also have to repay with P&I when the IRS caught up to them. Granted, not all of them were caught, but enough. And these people are not the type who can afford the P&I. David, you are no better than those tax preparers. You offer up your "advice" and "theories" and the people who take you up on it, don't earn enough to be on the IRS radar, but due to using your claims, you raise their audit risk, and when the IRS does find them, they can not afford teh P&I assessed, or even to pay back the amount due. They end up with Liens, and suffer, while you sit there still exposing your gibberish. You really f@@k those people over. Are you going to pay the P&I your followers are assessed? Are you going to serve their time? I am betting No!

Although IRS Form 843 cannot be used for claiming back income tax, [English-and mostly correct]

it can be used for an abatement of the fee paid for the presumed use of private credit in the form of Federal Reserve Notes that is based on the amount of income denominated thereby, when said presumed use has been consistently rebutted by lawful money being demanded for all transactions per 12 USC 411, with a substantive record of same created as admissible evidence by all related financial institutions in their normal course of business documentation.

Run on sentence, but worng. Form 843 is used to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax. To paraphrase the above, you seem to be saying there is a tax associated with the receipt of FRN's that can be rebutted by converting them to Lawful Money. There is no such thing. The tax is not on the receipt of the FRN, it is on the income earned regardless of how it is paid. The fact that is is pricate credit or public money is irrelevant. If I pay you with a note that entitles you to principal and interest on said principal, the receipt of the value of that note is taxable, whether I keep the note, or reddem it for cash (sell it on the open marked). I am still taxed as to the value, principal of the amount of the note received. The form of the compensation is not relevant to the taxability, show me otherwise, you can't!

This IRS Form 843 is a good tool to further expose the unspoken legal foundation of the “income tax” – that it is a legitimate usage fee for the use of the private credit and script of the Federal Reserve System.

Form 843 is none of that, it is a simple form used for:
http://www.irs.gov/pub/irs-pdf/i843.pdf
* A refund of tax, other than a tax for which a different form must be used. (See Do not use Form 843 when you must use a different tax form, next.)
* An abatement of tax, other than income, estate, or gift tax. Employers cannot use Form 843 to request an abatement of FICA tax, RRTA tax, or income tax withholding.
* A refund to an employee of excess social security or RRTA tax withheld by any one employer, but only if your employer will not adjust the overcollection. See the instructions for line 7.
* A refund to an employee of social security or Medicare taxes that were withheld in error, but only if your employer will not adjust the overcollection. See the instructions for Line 7. If you are a nonresident alien, see Pub. 519 for specific instructions.
* A refund of excess tier 2 RRTA tax when you had more than one railroad employer for the year and your total tier 2 RRTA tax withheld or paid for the year was more than the tier 2 limit. See the instructions for line 3.
* A refund or abatement of interest, penalties, or additions to tax, caused by certain IRS errors or delays, or certain erroneous written advice from the IRS.
* A refund or abatement of a penalty or addition to tax due to reasonable cause or other reason (other than erroneous written advice provided by the IRS) allowed under the law.
* A refund of the penalty imposed under section 6715 for misuse of dyed fuel.
* A refund or abatement of tier 1 RRTA tax for an employee representative.
* A refund of a branded prescription drug feee

[David Merrill]

That's right NYGman! Fees.

[Pottapaug1938]

This afternoon, I redeemed awful money.

I was at the bank, and I took some $1 FRNs which were about to fall apart, and got crisp new ones in their place.

[David Merrill]

There, fixed it for you so it's true.

Thank you for discerning that was a happy camper writing, not me.

[NYGman]

This afternoon, I redeemed awful money.

I was at the bank, and I took some $1 FRNs which were about to fall apart, and got crisp new ones in their place.

And magically they became non-taxable as those are not the dollars you earned [Assuming you chanted the right magic words at time of the exchange]

[LightinDarkness]

I do believe most people who follow these theories don't really have enough income to make much of an impact, or get noticed.

This I think is the source of every single internet TP "Victory." The truth is as you note that most of these people don't make enough income for the IRS to notice. Occasionally the IRS does "make an example" out of these people, but the reality is if your taxable income is <$30k I'd imagine you could file a tax return for a 100% refund written in Latin and it would take 10+ years for it to catch up with you. And if you only did it once or twice, it probably wouldn't ever catch up with you.

Its the same thing with the crackpot sovereign legal theories. Someone with a bit of a "rage against the machine" streak gets a traffic ticket and goes full blown crazy on the local police department with bizarre letters. Occasionally in those cases the police will simply let it go, not because the legal ritual did anything but because it just isn't worth there time to bother with. Then these people go on the internet and spread news of their "victory" and it becomes part of TP/sovereign lore.

[webhick]

This afternoon, I redeemed awful money.

I was at the bank, and I took some $1 FRNs which were about to fall apart, and got crisp new ones in their place.

And magically they became non-taxable as those are not the dollars you earned [Assuming you chanted the right magic words at time of the exchange]

And if you earned those $1 FRNS in a prior calendar year, you should amend your tax return for that year to properly show the adjustment to your previously taxable income...

[Pottapaug1938]

I got the FRNs enjoying a federally protected activity -- buying a six-pack of Stowaway IPA (Baxter Brewing Company).

I am sorely tempted to buy myself a red self-inking stamp reading something like "Redeemed Awful Money Pursuant to 31 C.F.R. Subpart B"....

[Arthur Rubin]

I think it true to say in all states that the tax liability for the state depends on the federal tax liability.

Yet more obfuscatory nonsense. What a surprise.

1) Your statement is false. States have varying methods of arriving at state income tax liability, none of them are based on federal tax liability. Some states use federal AGI as a starting point. Some states have no income tax at all.

Well, actually, there is a state where the state income tax is a percentage of the federal tax liability (recalculated to exclude items taxable at the federal level, but not at the state level, such as savings bonds).

[Cathulhu]

Question for the rest of you--I live in Wacky Washington, which has never had a state income tax, so I've never filed one in my life. But the Business and Occupation tax, which does apply to authors (the late Frank Herbert was the test case) is calculated on GROSS income, not net. Do any other state taxes get figured on gross? Just curious.

[LPC]

Question for the rest of you--I live in Wacky Washington, which has never had a state income tax, so I've never filed one in my life. But the Business and Occupation tax, which does apply to authors (the late Frank Herbert was the test case) is calculated on GROSS income, not net. Do any other state taxes get figured on gross? Just curious.

Pennsylvania and New Jersey both have income taxes that look somewhat like taxes on gross income, because there are no deductions and so they tax 100% of interest and dividends. But they only tax the net income from rents and businesses, so you can still "deduct" the expenses of maintaining rental income, as well as the expenses of operating a business.

There are some townships in Pennsylvania that impose mercantile taxes on gross income from sales of goods or services (I live in one), but those are usually minor. So yes, I pay a tax on my gross income from the practice of law, but it's a small amount.

[NYGman]

Question for the rest of you--I live in Wacky Washington, which has never had a state income tax, so I've never filed one in my life. But the Business and Occupation tax, which does apply to authors (the late Frank Herbert was the test case) is calculated on GROSS income, not net. Do any other state taxes get figured on gross? Just curious.

Pennsylvania and New Jersey both have income taxes that look somewhat like taxes on gross income, because there are no deductions and so they tax 100% of interest and dividends. But they only tax the net income from rents and businesses, so you can still "deduct" the expenses of maintaining rental income, as well as the expenses of operating a business.

There are some townships in Pennsylvania that impose mercantile taxes on gross income from sales of goods or services (I live in one), but those are usually minor. So yes, I pay a tax on my gross income from the practice of law, but it's a small amount.

Out of interest I will add, with respect to NJ, from an Investment fund perspective, some funds now set up offshore corporate blockers to effectivly net investment income, and allow New Jersey investors to pay on the net, not gross. This does require the offshore corporation to issue a PFIC statement, and the investor has to make the QEF election, but that usually isn't a big deal. Where there is a will, there is a way (and it is legal)...