Pete & Doreen Hendrickson in Tax Court

[notorial dissent]

Sure, and they are just going to keep on WINNING!!!!!!!!.

[Famspear]

The Tax Court trial is now set for March 27, 2017, at Detroit.

EDIT: A prize of five coupons for free meals and drinks at the Intergalactic Quatloosian Illuminati Restaurant, Bar and Grill goes to jcolvin2, who correctly anticipated this setting, earlier in this thread......

[jcolvin2]

EDIT: A prize of five coupons for free meals and drinks at the Intergalactic Quatloosian Illuminati Restaurant, Bar and Grill goes to jcolvin2, who correctly anticipated this setting, earlier in this thread......

The Intergalactic Quatloosian Illuminati Restaurant, Bar and Grill, aka "The Notorious RBG", my fave!

[Jeffrey]

Pete was on the Myprivateaudio talkshoe call tonight promoting his book and website. Are there any court orders that he might have violated?

[Famspear]

Pete was on the Myprivateaudio talkshoe call tonight promoting his book and website. Are there any court orders that he might have violated?

I don't think so. I don't think the government asked for any sort of injunction preventing him from selling his book, etc.

[Famspear]

I recall that the government did request -- and obtain -- injunctions with respect to Bill Benson and Irwin Schiff regarding their fraudulent activities.

To obtain a similar injunction against Hendrickson with respect to his scam, the government would have to show that Hendrickson aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document, and that he knows (or has reason to believe) that such portion will be used in connection with any material matter arising under the internal revenue laws, and that he knows that such portion (if so used) would result in an understatement of the liability for tax of another person. See Internal Revenue Code sections 7408(c)(1) and 6701(a).

[Famspear]

I think the key language is "aids or assists in, procures, or advises".

With respect to section 6701, at what point does a person's conduct exceed the contours of his right to freedom of speech under the First Amendment and become "aiding or assisting in, procuring, or advising" conduct that could be legally enjoined under section 7408?

Also, section 6701 provides for the possibility of a civil penalty of $1,000 against the person engaging in the conduct. (If the person has engaged in such conduct with respect to more than one document for a given taxpayer for a given taxable period, the penalty is limited to just one such document per taxpayer, in effect.)

If (for example) one thousand taxpayers submitted income tax returns to the Internal Revenue Service for a given tax year using Hendrickson's Cracking the Code scam, Hendrickson could be looking at a penalty of one million dollars for that year, if the penalty were found to apply to Hendrickson with respect to "aiding, assisting, procuring or advising" conduct.

[AndyK]

...
and that he knows that such portion (if so used) would result in an understatement of the liability for tax of another person.

This does not apply to Pete because he KNOWS that there is no understatement of the liability.

Any CtC educated return merely states the (in Pete's mind) CORRECT liability.

[Jeffrey]

IANAL, but my understanding is that once a court has ruled and explained to Pete that his theories are incorrect, it nullifies any "I didn't know" defense. At least that's how I think the reasoning applied to Porisky and his crew up in Canada.

So I don't see why they can't place an injunction on Hendrickson the same way they did to Schiff.

[Famspear]

IANAL, but my understanding is that once a court has ruled and explained to Pete that his theories are incorrect, it nullifies any "I didn't know" defense. At least that's how I think the reasoning applied to Porisky and his crew up in Canada.

So I don't see why they can't place an injunction on Hendrickson the same way they did to Schiff.

If Pete were to be indicted for some crime under the U.S. Federal income tax law for a tax year for which he has not already been tried, etc., he would still be allowed to present an argument that his conduct was not "willful" for that particular offense. It would be up to the jury to determine whether the government proves that his conduct was willful. Where willfulness is an element of the offense, the government would always have to prove willfulness, and the defendant would be allowed to present evidence of lack of willfulness.

In terms of a civil matter, such as the imposition of the $1,000 penalty or the issuance of an injunction prohibiting him from selling his scam book, etc., I'm not sure whether Pete would be prevented from at least raising such an argument, or even whether the culpable mental state under section 6701 is precisely the same as the "willfulness" standard. In my opinion, however, it is unlikely that he would prevail on the issue of whether he "knows" or does not "know" that his scam "Cracking the Code" nonsense is in fact nonsense.

What is more uncertain is whether his publishing of his book and his publishing of his web site commentaries, etc., rise to the level of "aiding, assisting, procuring or advising" conduct that could be constitutionally enjoined.

[The Observer]

I think the biggest difference between Schiff and Hendrickson is that Schiff pretty much had turned his books into a business/practice. He had set up a storefront office where he not only sold his books, but also charged his victims for helping them complete the paperwork and returns he directed them to file with the IRS. He also had employees that he hired and trained and directed to work with the marks who came in to the business. This was not simply Irwin putting books out there with his misguided and erroneous opinion or interpretation of US tax laws. He crossed way over the line of First Amendment rights by encouraging people to break the law and doing so by engaging in fraudulent practices and charging for it.

As far as I can tell, in my stupid layman's opinion, Pete stayed within the lines of his 1st amendment rights by not going beyond selling a book with bad interpretations of what the law meant.

[notorial dissent]

So you're saying, that for once, bone idle laziness came to Prattlin' Pete's defense???

[Jeffrey]

Pete seems to be making a steady income stream from the book sales based on Thursday's interview.

[Pottapaug1938]

Pete seems to be making a steady income stream from the book sales based on Thursday's interview.

What's the over/under on whether Petey will pay income taxes on that steady income stream?

[jcolvin2]

Pete seems to be making a steady income stream from the book sales based on Thursday's interview.

What's the over/under on whether Petey will pay income taxes on that steady income stream?

Under the table?
(I'm confident Pete would never overpay taxes.)

[Famspear]

Things are warmin' up. Preposterous Pete has filed an original and an amended pre-trial memorandum, and the government has filed a pre-trial memorandum.

Trial is still set for March 27th.

[notorial dissent]

So he back to his uncreative fiction writing???????

[Famspear]

So he back to his uncreative fiction writing???????

If there is a redeeming feature to Previously Prisoner Pete, it's that he doesn't try to write limericks......

[Judge Roy Bean]

There once was a felon named Peter
Whose writings weren't writ within meter
Twas fortunate for those
Who had paid through the nose
For the bilge he had sold to his readers

[Dr. Caligari]

Things are warmin' up. Preposterous Pete has filed an original and an amended pre-trial memorandum, and the government has filed a pre-trial memorandum.

Is there a link to those briefs?