David the Non Taxpayer?

[Mider]

By not filing the return as requested, even if you had no income, the file will remain open indefinitely. There is no SOL on not filing, even filing a fraudulent there is a window.

The original notice was from the computer, the second letter is from collections, so it might be a while until they get back to you. Also, I printed out the letter and the notices and gave it to a friend who is one of the IRS managers downstairs from us. He got a big laugh and said he pass the letter on in case it was missed.

On the time between, the IRS is now taking 60 to 90 days just for a small answer to a notice.

[AndyK]

Letter #1 from ACS -- Automated Collection System

That means some thing popped up on a computer when it was matching 1099s, etc with tax returns (or the lack thereof). It came to the attention of an IRS employee who initiated the letter.


Letter #2 from COLL -- Collwctions in Fresno

Collections does just what the name implies: They attempt to collect taxes which are owed. What's more interesting is that the letter came from Fresno, NOT David's normal processing center. AND, the letter is "based on your information." All that means is that David's status is on hold until the next AUR (Automated Under-Reporter) or ACS processing cycle when his name pops up again. At that point, the next letter will come from (if he's lucky) a Revenue Agent requesting a meeting (or additional information) to 'resolve some issues.' If he's NOT so lucky, the next letter will come from CI.

If David has half a brain, he should put it in gear and think about reaching out to the IRS to get himself squared up with the system.

If he doesn't, only bad or worse things WILL happen -- even though they may take time (during which the interest and penalty clocks keep ticking)

[Dr. Caligari]

that series of letters, plus other documents I rely upon, might help convince a JURY I was not acting willfully. Where things go from there, if I ever get there, with regard to that I am clueless.

David,
The issue of "willfulness" comes up only in a criminal case. It is a defense to a criminal conviction, but not to a civil assessment. So even if you are acquitted of failure to file, or never prosecuted at all, the IRS can still civilly collect from you all taxes owed, plus interest and civil penalties.

[Pottapaug1938]

I strongly suspect that David is one of these self-appointed tax experts who demands face-to-face meetings, on tax issues, despite the fact that he has not satisfied the IRS requirements for such a meeting -- as you might remember, he does not deal with governments (other than local) on the telephone. He, like so many others about whom we have read on this forum, is likely to get a very expensive lesson to the contrary.

[Famspear]

....Now I was asked "What can we get away with?" I was no longer asked to analyze the law alone, I was asked to analyze the law in light of the government's declining ability to audit a multinational organization and their declining enforcement capability, their increasing propensity to settle contentious issues on reasonably favorable terms and determine how close to the line the business could cut it without sending anyone to jail or getting embarrassed in the newspapers. In short, how much cheating could they expect to get away with?...

This reminds me that back in late 2002, Peter Canellos, a partner at the firm of Wachtell, Lipton, Rosen & Katz in New York, made a presentation at the University of Chicago Law School's 55th Annual Federal Tax Conference. He differentiated between what he called "conscientious tax practice" and "tax-shelter practice." Excerpts:

....a conscientious tax practice differs fundamentally from a tax-shelter practice. Traditional tax practice involves the creative application of tax principles to a real business transaction, whereas tax shelter practice revolves around a tax-saving idea rather than a pre-existing business objective. My thesis is that tax practice and tax-shelter practice are inconsistent, and that if you want to be a good tax practitioner, in the traditional sense, you really have to forego, in large part, the opportunity to practice in the tax-shelter area. This inconsistency derives in part from the intellectual differences in the two disciplines. The things that you think about as a tax practitioner and the principles that you rely upon to support your position are antithetical to the arguments you'll make as a tax-shelter practitioner.

[ . . .]

I think you will find that, to the extent that you're perceived to be a person largely involved in tax shelters, you cannot function effectively for your client in true business transactions or, in particular, before the IRS.

[ . . . ]someone who is perceived as [being] in the business of trying to stiff the government is not in the best position to ask for a discretionary ruling raising difficult issues in a real transaction. [ . . . ] Tax practice and tax-shelter practice don't mix, and people have to make a choice between the two. You can and should make the choice to practice tax law.

[ . . .]

When you're working in the tax shelter area, you're afraid of substance. The last thing you want to rely upon is substance[,] because there is no substance. All there is is form. So the tendency is to emphasize the form--to say, "Well, you know, a taxpayer has a right to reduce his taxes, he can choose the form of the transaction." In fact, those doctrines really arose and were respected in cases in which there was a business purpose and a substantive transaction. Relying on those doctrines in a fabricated transaction without any motivating substance or business purpose is a kind of charade.

[ . . . ]

So, while you may choose to say that all the technical rules are complied with, you can instead say, "I don't think this transaction satisfies substance versus form or business purpose and you shouldn't be involved." It is not unnatural for someone who does what we do to look at an artificial transaction and say that shouldn't work because it doesn't have substance. It's a natural thing to do. Now, the difficult problem comes when the client still wants to do the transaction.

--From "Guidelines for a Conscientious and Effective Tax Practice." Copyright 2003 by Peter C. Canellos (excerpted under the Fair Use doctrine).

[david]

I certainly HOPE I get a letter of further inquiry from a calm IRS agent that I might more fully explain my position. The inquiry I got from my letter of revocation felt more like a military probe to find my weakness. And as I pointed out, that probe was seriously lacking with regard to 'due process of law'.
After reviewing all the reply's to this topic and my original post, indulging in a little mood altering substances, sleeping on it, and further contemplation, I feel that I would like to address all the relatively intelligent replies with something like an essay or term paper which I feel is inappropriate as a reply. grixit seems to be one of authority here so I'll send it to him. Acting on his own opinion, he can delete it, suggest changes, or post it as is, which he is free to do. It may take a couple of days so I ask for your patience.
I truly do appreciate all your reply's and thank you all for your effort.
David

[Pottapaug1938]

I certainly HOPE I get a letter of further inquiry from a calm IRS agent that I might more fully explain my position. The inquiry I got from my letter of revocation felt more like a military probe to find my weakness. And as I pointed out, that probe was seriously lacking with regard to 'due process of law'.
After reviewing all the reply's to this topic and my original post, indulging in a little mood altering substances, sleeping on it, and further contemplation, I feel that I would like to address all the relatively intelligent replies with something like an essay or term paper which I feel is inappropriate as a reply. grixit seems to be one of authority here so I'll send it to him. Acting on his own opinion, he can delete it, suggest changes, or post it as is, which he is free to do. It may take a couple of days so I ask for your patience.
I truly do appreciate all your reply's and thank you all for your effort.
David

David, if you're going to play "barracks lawyer", you really ought to ask some real lawyers for the definition of "due process". You evidently don't have a clue. You also ought to ask them how to read a case as a whole, and not just mine quotes from them; and especially you need to find out what the HOLDING -- or central result -- of a case is. In the case of Brushaber, it's that the income tax is fully constitutional.

[david]

Pottapaug1938,,, of course taxes with regard to income are within the limits of the Const.. Where income is particular rights and property, the particular species of income is counted then divided. Where the act of producing income is taxed, it is at a rate per unit.
To all of you, Those letters above you're discussing only indicate my reason why I didn't file any 1040's and the IRS accepting that reason,,,, for the moment. I placed myself squarely front and center of IRS attention years ago. I've tried to talk with people who have the benefit of a formal education in the science and practice of law. I have questions, I'm not confident enough in what I have discovered. I need help. I thought this website might help me. In my opinion, it did. I acquired a computer solely for the purpose of making documents. I am a two fingered typist. I know how to point and click for news, weather, Google, and NASCAR. The New To Me gollywoggs available for publishing I don't feel the need to learn although it might be nice. Although I appreciate those mysterious things, I will explore them later.
If I find myself before the great and all-encompassing power of a court of competent jurisdiction, I am confident that my right to be provided meaningful and competent assistance of counsel at every step of the proceedings will have been fully recognized first, and, maybe he can document and discuss with me the error of my ways. If I disagree with his opinion, then the jury will decide, beyond a reasonable doubt.
It is now established that you think the present income tax law is within the limits of the Constitution. I don't. Your opinion and what you've done with it I claim no injury. My opinion and what I have done with it seems to disturb you, an injury. Is that perceived injury you claim to be experiencing enough for you to bring it before a third dis-interested competent authority to prove your facts beyond a reasonable doubt? Or will you wait for someone else to DO SOMETHING ?
I am on to the next topic.
I apologize to grixit for including him in something I intended to do without asking his permission first.
Thanks for all your help.
David

[Paths of the Sea]

It is now established that you think the
present income tax law is within the limits
of the Constitution.

I don't.

That's simple enough, and I think all the rest is smoke and mirrors.

Our "rule of law" is such that David doesn't get to decide that issue as a matter of law.

It has been decided against him, and I think he knows that full well.

As the Schiff kids recently noted, David can claim he believes it but he can't win that argument as a matter of law.

Whether or not David is required to file and owes any personal U.S. income tax is a matter not likely to be resolved satisfactorily here.

That the U.S. personal income tax IS CONSTITUTIONAL has been resolved as a matter of law and without regard to whatever David may want to claim he thinks about it.

Sincerely,
Maury Enthusiast!

[Pottapaug1938]

David, you must be a glutton for punishment. Like all too many who come here to Quatloos, you keep repeating the same old garbage such as "of course taxes with regard to income are within the limits of the Const.. Where income is particular rights and property, the particular species of income is counted then divided. Where the act of producing income is taxed, it is at a rate per unit", even after you have been repeatedly shown to be wrong about that. Rather than accept the admonitions of the people here on Quatloos who are well versed in the law (and many of us are lawyers, tax professionals or financial professionals), you nail your delusional colors to your masthead and say that the courts will decide whether your delusions are true or not.

Wonderful. Either you will waste your money defending the indefensible, or you will ask the taxpayers to pay for your defense. Frankly, I have better ways to spend my tax money.

[The Observer]

What I find remarkable is that David is essentially telling us that he willing to blaze the same unsuccesful trail that others have already tried to go down and failed. David believes that somehow,someway that his case, despite it being essentially no different than any other tax denier case, has a chance of winning in a court system that has never ruled in favor of tax defier arguments.

Lots of luck, David.

[Famspear]

....I feel that I would like to address all the relatively intelligent replies with something like an essay or term paper which I feel is inappropriate as a reply....

"Inappropriate" replies are what we've pretty much come to expect.....

[JamesVincent]

It is now established that you think the present income tax law is within the limits of the Constitution. I don't.

Doesn't matter what we think, the Courts have accepted and ruled it Constitutional. That's all that matters. I don't think that LEOs should use night vision devices to see in your car at night to see if you have a seat belt on, I feel it is an invasion of privacy and, hence, unconstitutional. Courts don't, have allowed it for several years that I am aware of in Md.

Your opinion and what you've done with it I claim no injury.

Huh?

My opinion and what I have done with it seems to disturb you, an injury.

I think you're confusing frustration with a disturbance. Everyone here wants you to NOT destroy your life, you seem to want to. That gets frustrating.

Is that perceived injury you claim to be experiencing enough for you to bring it before a third dis-interested competent authority to prove your facts beyond a reasonable doubt? Or will you wait for someone else to DO SOMETHING ?

As was already noted it HAS been before a third party. In fact, the highest third party it can go to in this country, the Supreme Court. And THEY decided that the laws on taxation were legal.

All this mumbo-jumbo that you have spouted about counting and dividing and setting a special rate can all be summed up real easy. The 16th eliminated any possible need for a tax to be apportioned, and, yes, there is a rate that you pay taxes on. It's called your rate of pay. And the amount of money you are paid determines your tax liability or lack thereof. So even if you were to try that argument, it's a non starter, there is a rate in place.

[wserra]

If I disagree with his opinion, then the jury will decide, beyond a reasonable doubt.

You've said stuff like that before, david. For example, "the only action acceptable is before a court, the jury will decide . . . Until I become aware of any authority which convinces me 26USC 1 (c) fits within counts and shares or reaches the act, or, a jury does the convincing for me, I can not in good concience admit to anything with regard to 26 USC 1 (c) and any directly related statutes". And here: "If somebody gets their panties in a wad because I'm not obeying the law, it is their responsibility to bring it before a court where I am ENTITLED to raise doubt before a jury, along with the help of Constitutionally guaranteed meaningful and competent assistance of counsel, not co-counsel (what ever that is). Plaintiff bears the burden of proof, not the defendant. Now, if a plaintiff can convince a jury that 26 USC 1 (c) resembles a tax according to count and divide or tax per unit produced, well,,,,,,, guess I'll have to agree." Others have called david out on the many wrong things he has written, but not this one.

A jury will never decide if you're right about the law, david. A jury may decide whether you acted willfully in not filing, a position you really don't want to find yourself in, because your freedom will be at stake. A judge will decide whether you're right about the law. And, if the issue is whether you owe taxes, penalties and interest for those years you didn't file, and your only defense is your interpretation of the law, a judge will decide that too.

But I really question whether david makes the income tax threshold. He is about to turn 65. Mazel tov. David's family owns a liquor store in nearby Chicopee, MA, called Winn Liquors. It appears that, until a few years ago, david had an interest in that store. He gave up that interest at just about the same time as he stopped paying taxes. Now, I admit that the documents I've seen are not definitive, but this seems the most likely explanation for them.

Perhaps david can clear it up.

[Dr. Caligari]

If I find myself before the great and all-encompassing power of a court of competent jurisdiction, I am confident that my right to be provided meaningful and competent assistance of counsel at every step of the proceedings will have been fully recognized first, and, maybe he can document and discuss with me the error of my ways. If I disagree with his opinion, then the jury will decide, beyond a reasonable doubt.

You will get appointed counsel and trial by jury only if you are indicted in a criminal case. If the IRS just decides to proceed against you civilly by assessing a tax deficiency and seizing your bank accounts, you will get neither.

[operabuff]

You can get a jury trial in a civil refund action filed in a U.S. District Court. 28 USC 2402.

[Famspear]

If I find myself before the great and all-encompassing power of a court of competent jurisdiction, I am confident that my right to be provided meaningful and competent assistance of counsel at every step of the proceedings will have been fully recognized first, and, maybe he can document and discuss with me the error of my ways. If I disagree with his opinion, then the jury will decide, beyond a reasonable doubt.

You will get appointed counsel and trial by jury only if you are indicted in a criminal case. If the IRS just decides to proceed against you civilly by assessing a tax deficiency and seizing your bank accounts, you will get neither.

Good point.

David, if the Internal Revenue Service ever decides that your federal income tax for a given year (computed without reduction for any payments or credits you may have made) exceeds the amount you reported on your federal income tax return for that year (also computed without reduction for payments or credits), they will send you a series of notices. That excess is called the "deficiency" (which is usually the amount you owe, but not always). If you filed no valid tax return for that year, the entire amount of tax as determined by the IRS will be the "deficiency." These notices will culminate in something called a "statutory notice of deficiency" or "ninety-day letter" that will be sent to your "last known address."

From the date of the statutory notice of deficiency, you will have 90 days to file a petition in the U.S. Tax Court. If you do not file a timely petition, the IRS will assess the deficiency. That means that the IRS will formally record the amount of the deficiency on its books.

The IRS will then send you a written notice, called "notice and demand". If you fail to pay the tax within the period prescribed in the notice (probably ten days), then, by operation of law, a statutory tax lien will come into being -- effective retroactively to the date of the assessment. This tax lien is not required to be recorded in the property records of any county or parish to be valid against you. The lien will cover all property and rights to property (whether real estate, cars, household and personal effects, whatever) that you own at the time of the assessment, plus all property and rights to property that you acquire after the date of the assessment, until the tax is satisfied (such as, by being paid) or until the statutory period of limitations on collection expires (generally, at least ten years from the date of the assessment).

After that, the IRS may proceed to take further steps and eventually seize your property, and in some but not all cases, may do that without going to court. In the case of your residence, the IRS may have to obtain court approval first.

If, on the other hand, you file a Tax Court petition within the 90 day period I described above, you will have a chance to litigate with the IRS over the tax without having to first pay the tax -- but you will not be entitled to a jury trial in the Tax Court. The judge will decide the issues of fact that would otherwise be decided by a jury.

If you want a jury trial, you will have to FIRST pay the tax that the IRS says you owe, and then sue for a refund in U.S. District Court.

You may also litigate the refund claim in the U.S. Court of Federal Claims.

If you happen to file bankruptcy, you can have the Bankruptcy Court decide the validity of the tax without first having to pay it.

Regardless of which court you are in, the burden of pleading and the two burdens of proof will be (with a few exceptions) on YOU to prove that you are right and the IRS is wrong. The two burdens of proof are (1) the burden of production (also known as the burden of going forward with evidence), and (2) the burden of persuasion. So, there are three burdens that will be on you.

I hope you know what you might be getting into.

[Paths of the Sea]

You can get a jury trial in a civil refund
action filed in a U.S. District Court.

I think that would only be the case if there is a an issue properly to be decided by a jury.

As others have noted, questions of law are not properly determinable by a jury.

In simple terms, where appropriate, juries are used to resolve disputed questions of fact, NOT disputes over the law.

Right?

Sincerely,
Maury Enthusiast!

[operabuff]

I think that would only be the case if there is a an issue properly to be decided by a jury.

As others have noted, questions of law are not properly determinable by a jury.

In simple terms, where appropriate, juries are used to resolve disputed questions of fact, NOT disputes over the law.

Right?

Sincerely,
Maury Enthusiast!

That's right. Either party could move for summary judgment arguing that there were no material facts in dispute.

Also, there's no right to have counsel appointed for you in a civil suit.

[Famspear]

....Either party could move for summary judgment arguing that there were no material facts in dispute.....

In that situation, I could see David foolishly trying to avoid a summary judgment against him by arguing (for example) that there is a dispute about "whether the tax imposed under 26 USC section 1(c) does or does not resemble a tax according to count and divide or tax per unit produced." David seems to be hung up on this question, and David wants to say that if the section 1(c) tax does not resemble a "tax according to count and divide or a tax per unit produced", then he should not be liable for the federal income tax.

There would be two problems with David's argument. First, the question is not a question of fact. It's a question of law. So, the question cannot be an "issue of material fact." Not only is it not a material question of fact; it is not a question of fact at all.

Second, where there is no genuine issue of material fact, the movant (the government, in this hypothetical case) is going to win on its motion for summary judgment if the government is entitled to judgment "as a matter of law." And if the only question is "whether the section 1(c) tax does or does not resemble a tax according to count and divide or tax per unit produced", the answer is going to be that section 1(c) is not required to resemble such a tax. There is no requirement under the U.S. Constitution, as amended by the Sixteenth Amendment, that a section 1(c) tax resemble a "tax according to count and divide or a tax per unit produced." So, if no other issues have been presented by David, the government is going to win on its motion for summary judgment; the government is entitled to judgment as a matter of law.

David does seem to not understand that his arguments about the Constitution and tax law have no legal merit. David's arguments are so meritless that they are frivolous.

If David files a federal income tax return and takes a position on that return based on his argument that a section 1(c) tax must be (or must resemble) a "tax according to count and divide or a tax per unit produced" to be valid, David risks having a $5,000 penalty imposed on him under section 6702.

If he tries to make his argument in the U.S. Tax Court, section 6673 of the Internal Revenue Code could be used to impose a penalty of up to $25,000 for making a frivolous argument in that court.

If he makes that argument in a U.S. district court, he could be penalized monetarily under Rule 11(b)(2) and Rule 11(c) of the Federal Rules of Civil Procedure.

If he were to make that argument in a U.S. Bankruptcy Court, he could be penalized under Rule 9011(b)(2) and Rule 9011(c) of the Federal Rules of Bankruptcy Procedure.

If he appeals a Tax Court decision and uses his argument on appeal, he could be penalized under 26 USC section 7482(c)(4).

If he were to make that argument in an appeal from other federal courts to a U.S. Court of Appeals or in a proceeding before the U.S. Supreme Court, he could be penalized under section 1912 of title 28 of the United States Code or Rule 38 of the Federal Rules of Appellate Procedure.

David, are you getting any hints, here? Wise up.