Meissner - CFC Rejects Zero Return

[jcolvin2]

https://ecf.cofc.uscourts.gov/cgi-bin/s ... v0928-24-0

Another failure to rebut by private sector, non-federal citizens!

[Dr. Caligari]

They sound like Hendrickson disciples (does he still have any?).

[AndyK]

Major victory. No friv pen or Tax Court sanction --- YET

Smart money is on seeing them again in Tax Court contesting a CDP decicion

[Uilliam]

This case should be cut and dry.

The IRS admitted that neither person had any taxable income and it sent them a refund check for the withholding amount minus SS and FICA.

Since there was no taxable income, then there can also be no tax, which includes the surtaxes of SS and FICA.

Those people are legally due their full amount of withholding. How is that so hard to understand?

[Pottapaug1938]

This case should be cut and dry.

The IRS admitted that neither person had any taxable income and it sent them a refund check for the withholding amount minus SS and FICA.

Since there was no taxable income, then there can also be no tax, which includes the surtaxes of SS and FICA.

Those people are legally due their full amount of withholding. How is that so hard to understand?

This is a case of "garbage in, garbage out". The IRS freely says that, if a person has no taxable income, then they are entitled to a refund of all taxes paid. The problem comes when the claim of zero taxable income is based on legal fallacies.

There are many cases, in American jurisprudence, where overworked IRS employees approve a zero income tax return, during its initial review; but those returns are often flagged for further review. Eventually, the IRS realizes that the returns are fraudulent, and comes after the person(s) whose return it is.

[BBFlatt]

In addition to the points made by Pottapaug, allow me to add a couple of things.

The IRS processing a tax return submitted by a taxpayer does not constitute a legally enforceable admission that the return was correct. That's why it can perform audits and criminal prosecutions after the return is filed and any refund issued.

Second, it is within the realm of possibility that despite Meissner's bogus claim that wages are not income that they had zero taxable income due to a large amount of deductions or credits, such as net operating loss carryovers. In that case, it would be proper to refund the income tax withheld, but the Social Security and Medicare taxes, which are imposed on wages without regard to any deductions, would not be refundable.

Thirdly, I don't believe the IRS has the authority (except perhaps as part of the broad settlement authority exercised by Appeals or Counsel) to issue refunds or credits of Social Security and Medicare taxes to the employee. Rather the correct procedure if an employee believes those taxes have been over-withheld is to request a refund from the employer, who could then file a claim with the IRS. It's the employer after all who made the error and actually paid the tax.

[noblepa]

In addition to the points made by Pottapaug, allow me to add a couple of things.

The IRS processing a tax return submitted by a taxpayer does not constitute a legally enforceable admission that the return was correct. That's why it can perform audits and criminal prosecutions after the return is filed and any refund issued.

Second, it is within the realm of possibility that despite Meissner's bogus claim that wages are not income that they had zero taxable income due to a large amount of deductions or credits, such as net operating loss carryovers. In that case, it would be proper to refund the income tax withheld, but the Social Security and Medicare taxes, which are imposed on wages without regard to any deductions, would not be refundable.

Thirdly, I don't believe the IRS has the authority (except perhaps as part of the broad settlement authority exercised by Appeals or Counsel) to issue refunds or credits of Social Security and Medicare taxes to the employee. Rather the correct procedure if an employee believes those taxes have been over-withheld is to request a refund from the employer, who could then file a claim with the IRS. It's the employer after all who made the error and actually paid the tax.

That is true if the overpayment was made by a single employer. However, if the taxpayer has more than one employer during the year, he/she might have been on track to hit the FICA deduction limit with the first employer. However, when the employee changed jobs, the new employer continues to withhole FICA taxes for the remainder of the year.

This can result in the employee paying more than the FICA limit, even though no single employer collected more than the limit. In that case, the IRS will include the overpayment amount as either a refund or credit againt tax due.

[BBFlatt]

I believe you are right, thanks for the correction.

[Arthur Rubin]

That is true if the overpayment was made by a single employer. However, if the taxpayer has more than one employer during the year, he/she might have been on track to hit the FICA deduction limit with the first employer. However, when the employee changed jobs, the new employer continues to withhole FICA taxes for the remainder of the year.

If there is a dispute as to whether the two employers are the same (the employer(s) say no, and the IRS and/or SSA say yes), the employee is screwed, as the statute of limitations for applying for the credit may expire while the taxpayer is arguing with the employer(s). This happened to some (aerospace) colleagues of mine around 1996.

[Jeffrey]

Did Uill even read the decision? They had $132,900 combined in taxable income.

[Pottapaug1938]

People like Uill don't "read decisions", unless it's to search for quotes to mine. They are incapable of distinguishing the holding in a case from dicta and other explanations.

[notorial dissent]

People like Uill don't "read decisions", unless it's to search for quotes to mine. They are incapable of distinguishing the holding in a case from dicta and other explanations.

Doesn't strike me as the mining type, requires too much effort and actual work. He strikes me more as the steal it whole from someone else who probably stole it from someone else type. Also doubtful that he could even parse what he was busy stealing.

[noblepa]

People like Uill don't "read decisions", unless it's to search for quotes to mine. They are incapable of distinguishing the holding in a case from dicta and other explanations.

Doesn't strike me as the mining type, requires too much effort and actual work. He strikes me more as the steal it whole from someone else who probably stole it from someone else type. Also doubtful that he could even parse what he was busy stealing.

It is my understanding that, due to the huge number of returns filed each year, and the legal requirement that returns be processed promptly, little more than checking the arithmetic is done when the return is filed.

As has been pointed out, however, certain things can cause the computer to flag the return for a later, more thorough examination by a human being.

One year, for example, back when they first began requiring SSNs for dependents claimed on a return, I fat-fingered my son's SSN. The return sailed through with no glitches. A few months later, however, I received a polite, but firm letter from the IRS, saying that they had checked the SSN I entered against the SSA roles and found no match. Would I please provide a correct SSN or pay an additional tax. In this case, it was easy. I just sent them his correct SSN.

The point is, at the time I filed the return, the computer looked at it and found nothing IMMEDIATELY wrong, only discovering months later that the SSN was invalid. I don't think I could have argued that, since they accepted the SSN in April, they could not dispute it in August.

[Famspear]

For years, ex-con Peter Hendrickson has tried, in an attempt to falsely portray his scam as being based on the law, to perpetuate the lie that the Internal Revenue Service has "thoroughly vetted" the tax refunds received by his followers based on claims filed using his Cracking the Code tax evasion scam. His web site still contains drivel like this:

As you'll see in the documentation at the bottom of this page, every one of these refunds has been thoroughly vetted by the government before being issued, and all have issued even while the government has striven mightily to suppress the knowledge of the law by which these claims are made.

[ . . . ]

KEEP IN MIND: Every one of the filings producing these refunds and other victories went through elaborate scrutiny by the tax agency, as is true of ALL CtC-educated claims.

After all, the IRS is not some uniquely naive entity that just sends out checks because someone asks for them! What a ridiculous thing to suggest!

[ . . . ]

Contrary to self-serving myths promoted by the IRS and its fellow-travelers to keep you from grasping the evidentiary significance of CtC-educated victories, all filings claiming refunds (not just CtC-educated filings) are challenged by default. As the Taxpayer Advocate Service of the Department of the Treasury describes it in its 2013 Annual Report to Congress:

The return integrity process is complex and multifaceted. A tax return must travel a long path with many potential roadblocks before the IRS accepts it as filed. The main goal of IVO [Integrity Verification and Operation] is to stop fraudulent refunds before they are issued by identifying potentially false returns, usually through wages or withholding reported on the returns. The IRS does this primarily with the Electronic Fraud Detection System, which was built in the 1990s. EFDS runs all individual tax returns through various filters to identify characteristics that may indicate a high risk of fraud [ . . ]

[ . . . ]

In particular, ALL CtC-educated filings have ALWAYS been scrutinized, both by the EFDS and the "Questionable Refund Program", not to mention every IRS employee who sees them, before the returns have been processed and the refunds have been issued. The vast majority of such filings show and claim a refund of withholdings -- ALL withholdings -- while showing no "income" at all, and many are even accompanied by detailed explanations of exactly what is being expressed with the return [ . . .]

Pete is trying to give the false impression that IRS personnel (1) are elaborately scrutinizing refund claims filed using the "Cracking the Code" scam, (2) are recognizing that the refund is being claimed using Pete's "Cracking the Code," income means only amounts realized in an activity connected to the exercise of a federal privilege nonsense, (3) are striving mightily to find a way to avoid paying the refund, (4) but are giving up and reluctantly paying the refunds because IRS personnel agree that Pete is correct.



I have been dealing with the Internal Revenue Service for 28 years, and I've seen a lot more of the IRS than Pete Hendrickson has ever seen, or ever will see. The quotation provided by Pete describing the "complex and multifaceted" IRS analysis process notwithstanding, the IRS process is indeed (sadly) closer to a "because someone asks for them" situation than it is to the preposterous scenario that Pete would like his readers to believe. Prevaricating, paralogistic Pete knows about as much about the process as the average person knows about the Planet Neptune.

[Famspear]

Gary Meissner is listed by Hendrickson in the losthorizons web site as being one of Hendrickson's acolytes, and Hendrickson includes a link to a video made by Meissner:

https://www.youtube.com/watch?v=gK7PgxJ ... e=youtu.be

[Burnaby49]

It is my understanding that, due to the huge number of returns filed each year, and the legal requirement that returns be processed promptly, little more than checking the arithmetic is done when the return is filed.

As has been pointed out, however, certain things can cause the computer to flag the return for a later, more thorough examination by a human being.

I used to be involved in the April initial assessing rush when 10 million or so tax returns were filed and I can confirm that's exactly how things are done in Canada.

Some computer flags, like the huge fake losses compared to income that the Fiscal Arbitrators tried to claim, or the fake charitable donation claims, kick in at initial assessing and the returns are put aside without being assessed for a closer look later. But, by and large, returns are initially just checked for arithmatic and a comparison to the information slips. Not even much of that any more since most returns are filed online without supporting documentation.