Hendrickson on Sullivan v. United States, 788 F.2d 813

[jg]

Open Eyes Help Avoid The Cow-Pies Lying In The Path To The Barn Door

Incomplete or out-of-context citations of language from certain court rulings are among the many parallel efforts made by the IRS and other tax agencies to discourage Americans from learning the truth about the "income" tax. No one should be troubled by such carefully selected excerpts, of course, no matter what they appear to say.

After all, each of us has read the law for ourselves (both Constitutional and statutory), and know what it says; and no "interpretation" of the law by a judge could actually change its meaning, no matter what language was used in expressing that "interpretation". Even if there were Supreme Court rulings which appeared to conflict with the words of the law (happily, there aren't, at least insofar as the "income" tax is concerned), those rulings would not actually change the law. All that such rulings could do is reveal areas where better scholarship, more diligence or more forcefulness might be needed to remind or instruct the court as to the letter and/or meaning of the law (or reveal the need for Constitutional amendment in order to lay down the law in a manner better-suited to our purposes).

Nonetheless, common-sense would suggest that there must be at least a few lower court rulings which really DO presume to conflict with-- or defy-- the clear words of the law (and, if not ultimately overturned, generally would reflect nothing more nefarious than the willingness of a mildly corrupt judicial system to exploit an ill-equipped defendant arguing issues he himself does not understand). However, if there are such rulings, they must be vanishingly few. We know this because common sense also tells us that whatever rulings of this sort might exist, the IRS would be cataloging them all, and using the best of them-- best for its purposes, that is-- in its keep-the-marks-in-line propaganda.

In fact, I actually can't think of any ruling I've looked at which is presented by the 'service' for this purpose that doesn't have an escape-hatch of some kind built in to either the nuances of its language or the context of the case. Thus, my long-standing response to those expressing concern about scare-citations by the IRS and other tax agencies has been, "Read the ruling in its entirety!" Doing so not only puts to rest the immediate concern, but also inoculates the researcher against unfounded fears going forward. Sometimes, it does even more than that...
***
Colorado Warrior Gary Neuger has never suffered from any concern about such citations-- Gary has read the law and knows the truth for himself. But he recently had occasion to examine and respond to one of the most broadly deployed of these misleading citations while preparing materials for his wife Beth's lawsuit against the Colorado Department of Revenue (CDOR) over the agency's attempt to evade the law through the ploy of categorizing her refund claims as "frivolous".

The case Gary examined is Sullivan v. United States, 788 F.2d 813 (1st Cir. 1986). Those who have been in the trenches in the battle to restore the rule of law as regards the income tax will recognize this citation, which is included in every IRS "Frivolous Arguments" propaganda piece, and is cited ad nauseum in DOJ tax-case briefs. The snippet typically presented by these beneficiaries of continued American ignorance about the "income" tax (including the CDOR in Beth Neuger's case) is as follows:

“To the extent Sullivan argues that he received no ‘wages’ because he was not an ‘employee’ within the meaning of 26 U.S.C. § 3401(c), that contention is meritless. Section § 3401(c), which relates to income tax withholding, indicates that the definition of ‘employee’ includes government officers and employees, elected officials, and corporate officers. The statute does not purport to limit withholding to the persons listed therein."

(As an aside, I'll note that even on its face, this excerpt says nothing of any significance. Saying that "The statute does not purport to limit withholding to the persons listed therein." is in no way the same as saying that "Withholding applies to everybody, period." although this is how the tax agencies would like this language to be understood. Since the Sullivan ruling DOES NOT say this, the issue of whether any given person is or is not among those to whom withholding DOES apply is entirely unaddressed by this meaningless rhetoric. The very fact that misleading, empty nonsense such as this is what the tax agencies must rely upon in attempting to suggest universal applicability of the "income" tax emphasizes the complete lack of substance in that ridiculous contention. Click here for a detailed discussion of exactly how 3401(c) is and is not limited.)

Gary ended up looking at Sullivan because the CDOR has cited this case in its response to interrogatories presented by Beth as part of the early stages of her lawsuit. Gary immediately observed that even taken as mindlessly presented by the agency, and without further investigation, the citation is irrelevant to the issue of whether Beth's tax returns meet the statutory definition of "frivolous", which is the sole issue involved in the contest. Colorado's legal definition of "frivolous" mimics the federal version, providing that,

CRS 39-22-603.5:

(1) As used in this part 6, unless the context otherwise requires, "frivolous return" means a return filed by any person that purports to be a return of the tax imposed by this article but that:

(a) does not contain information on which the substantial correctness of the return may be judged, or

(b) contains information that on its face indicates that the return is substantially incorrect.

(and going on to provide that IF a return meets one of the above specifications regarding its mechanical construction, there must also be evidence of improper purpose or unsupported legal reasoning underlying that construction). Thus, the question of to whom the "withholding" provisions of 3401(c) apply have no bearing on this case whatsoever.

However, proper diligence prompted Gary to look at the ruling in its entirety. In doing so, he discovered that Sullivan just happens to be a case about a "frivolous" filing penalty under the relevant federal statute (reflected at 26 USC 6702), and that the court says a great deal more than what is excerpted by the CDOR (and other tax agencies in their efforts to suppress the truth...). In fact, this ruling, when examined in whole, actually supports BETH'S position (and that of any other CtC-educated person dealing with the same issue).

Referring to the CDOR's excerpt of the ruling, Gary furnishes the actual substance of the court's declaration in the case, pointing out that:

"[W]hat Defendant in the instant case fails to note is that,

“... taxpayer did not submit actual tax return or schedule for profit or loss from business or profession... Sullivan filed with the IRS a letter entitled “Request for Refund of Income Tax,” and two attached documents entitled “Income Tax Refund Statement for the Tax Year 1983,” and “Business Income/Loss Statement for the Tax Year 1983.” In the letter, Sullivan stated that he was a “natural individual and un-enfranchised freeman” who “neither requested, obtained, nor exercised any privilege from an agency of government” for taxable year 1983... Sullivan reported no income from “wages, tips, [or] other compensation”, even though two Forms W-2 he attached indicated that he had received $32,502.32 in “wages, tips, [or] other compensation.”

Also of significance to the instant case which Defendant failed to quote:

“Sullivan’s purported return facially indicated (bold added) that his self-assessment was incorrect, and that his position was frivolous. The attached Forms W-2 show that Sullivan received wages totaling $32,502.32 in 1983, yet he reported no income from wages on the purported return.”

Also:

“Here, the only questions to be resolved were whether the documents Sullivan filed amounted to a purported return under section 6702, whether the purported return contained information that on its face (bold added) indicated that the self-assessment was substantially incorrect, and whether Sullivan’s position was frivolous.”

Therefore, Sullivan v. United States gives us a clear indication of what the phrase “on its face” means. In Sullivan’s case, there was inconsistency between what was on his purported return and the information returns (W-2) he attached to it. Thus the court determined that Sullivan’s return contained information that on its face indicated that the return was substantially incorrect, rendering the return frivolous. As discussed earlier, this is clearly a violation of CRS 39-22-603.5(1)(b) which then opened Sullivan to the provisions of CSR 39-22-603.5(1)(c).

In contrast, in the instant case, Plaintiff has attached documents to her 1997 through 2003 returns (Forms 4852) that are entirely consistent with information on the returns themselves. Thus, according to Sullivan, Plaintiff’s returns do not meet CRS 39-22-603.5(1)(b). Nor has Plaintiff in the instant case attached any arguments or contentions such as those made by Sullivan to her Colorado individual income tax returns, nor made such claims in bringing suit against Defendant."

***
Gary has done some excellent work here in service to the truth, the nature of which should be borne in mind by everyone when encountering the increasingly desperate efforts of the beneficiaries of the lie to prop up their rapidly crumbling scheme. Never forget the cardinal rule of self-serving immorality: "When you can't dazzle 'em with brilliance, baffle 'em with b******t!"; and never lose sight of the fact that when anyone DOES resort to b******t, it is unambiguous evidence that nothing better is available, and the broader assertion they are attempting to support is simply a lie.

At least he follows the cardinal rule of self-serving immorality.

[The Observer]

Incomplete or out-of-context citations of language from certain court rulings are among the many parallel efforts made by the IRS and other tax agencies to discourage Americans from learning the truth about the "income" tax. No one should be troubled by such carefully selected excerpts, of course, no matter what they appear to say.

But of course it is completely A-OK for TPs to adopt this tactic.

[LPC]

In fact, I actually can't think of any ruling I've looked at which is presented by the 'service' for this purpose that doesn't have an escape-hatch of some kind built in to either the nuances of its language or the context of the case.

In other words, no matter how clearly and emphatically a court might tell him he's wrong, Hendrickson will *always* find some "nuance" that allows him to ignore what the court said.

This is beyond self-delusion and into the realm of the pathological.

[notorial dissent]

"Read the ruling in its entirety!"

Famous and disregarded words of the master.

Gary has read the law and knows the truth for himself.

Yet he doesn’t seem to be able to read and comprehend a simple English statement.

"The statute does not purport to limit withholding to the persons listed therein." is in no way the same as saying that "Withholding applies to everybody, period."

Strange, I don’t have any problem getting that out of it, and apparently neither does the rest of the thinking universe.


Again with the “includes” doesn’t mean includes argument, like it is going to work this time when it has failed every other time it has been trotted out.

So they have the options of nailing her for either filing an incorrect return, or a false one. Which carries more jail time and bigger fines?

[Quixote]

hendrickson wrote:

"The statute does not purport to limit withholding to the persons listed therein." is in no way the same as saying that "Withholding applies to everybody, period."

Strange, I don’t have any problem getting that out of it, and apparently neither does the rest of the thinking universe.

I have a problem getting that out of it. Hendrickson's statement is not wrong, just irrelevant. He is correct that saying a particular limitation does not apply is not the same as saying no limitations apply. Hendrickson's mistake, if it is a mistake and not a rhetorical ploy, lies in believing that the two statements must have the same meaning to be significant in the context of the court's explanation. He believes, or pretends to believe, that the court was trying to show that no argument existed to show that Sullivan was not an employee. All the court was doing was pointing out that the argument Sullivan thought he had found didn't work.

[jg]

Therefore, Sullivan v. United States gives us a clear indication of what the phrase “on its face” means. In Sullivan’s case, there was inconsistency between what was on his purported return and the information returns (W-2) he attached to it. Thus the court determined that Sullivan’s return contained information that on its face indicated that the return was substantially incorrect, rendering the return frivolous. As discussed earlier, this is clearly a violation of CRS 39-22-603.5(1)(b) which then opened Sullivan to the provisions of CSR 39-22-603.5(1)(c).

In contrast, in the instant case, Plaintiff has attached documents to her 1997 through 2003 returns (Forms 4852) that are entirely consistent with information on the returns themselves

The documents attached may be consistent with the information on the returns; but the documents attached and the return are inconsistent, like in Sullivan's case, with the information returns.
Hendrickson claims that disagreement with the information returns can render the information returns moot or less important than the self serving testimony on the return (and the documents attached).

"If I say the payments I got for work are not "wages" then they are not subject to the income tax" is most certainly a frivilous argument.

[Neckbone]

Colorado Warrior Gary Neuger has never suffered from any concern about such citations-- Gary has read the law and knows the truth for himself.

TP logic at its finest. Gary is not concerned by any precedent applicable to the facts of his case. He knows the truth already. I am curious about one thing, however; Gary already knows the truth, why does he bother reading the law?

To Gary's wife Beth: You need to wake up and figure out that you're just Gary's windmill jousting lance. Wake up before you get in too deep and lose everything.

Neckbone

[notorial dissent]

Actually, she is just so much grist for the CDR's mill and will be ground exceedingly fine by the time they are done with her if she continues down this path.

They have no sense of humor, and will waste no time on her husband's delusions.

[LPC]

hendrickson wrote:

"The statute does not purport to limit withholding to the persons listed therein." is in no way the same as saying that "Withholding applies to everybody, period."

Strange, I don’t have any problem getting that out of it, and apparently neither does the rest of the thinking universe.

I have a problem getting that out of it. Hendrickson's statement is not wrong, just irrelevant. He is correct that saying a particular limitation does not apply is not the same as saying no limitations apply.

I would agree. Hendrickson is using what I call "guardrail to guardrail" rhetoric, by which I mean that he lurches between extreme positions, unable to see any middle ground.

One recurring example is one of the arguments raised by 861 proponents. (WARNING: Thread hijack approaching.) When told that section 61 really does mean ALL income, regardless of source, Larken Rose (and others) often respond by saying that the US couldn't possibly expect to tax citizens of China on income earned in China. That section 872 provides a specific solution to that problem is a fact that they refuse to recognize.

It's a kind of absurd reductio ad absurdum. They try to demonstrate the falsity of a statement by demonstrating the absurdity of a very different statement.

Hendrickson's mistake, if it is a mistake and not a rhetorical ploy, lies in believing that the two statements must have the same meaning to be significant in the context of the court's explanation. He believes, or pretends to believe, that the court was trying to show that no argument existed to show that Sullivan was not an employee. All the court was doing was pointing out that the argument Sullivan thought he had found didn't work.

What is bizarre to me is that Hendrickson seems to believe that:

1. A statement that the court did NOT make (that there are no exclusions from withholding) is false; and

2. Therefore the statement that the court DID make (that withholding is not limited to government employees and corporate officers) is also false; and

3. Therefore, he can make the exact same argument that Sullivan made and he can win, even though Sullivan lost.

And this is also typical of tax protesters. They rely for the most part on snippets of court opinions from cases that have nothing whatsoever do to with the issue they are arguing. And when you show them a case that is directly on point, and specifically addresses the issue they are arguing, they find some reason to ignore it. If necessary, they will make up new "facts," outside of the records, to provide a reason to ignore what the court wrote. (For example, who knew that Brushaber was an agent for foreign investors and *that* was why the Supreme Court ruled the way it did?)

[Neckbone]

If necessary, they will make up new "facts," outside of the records, to provide a reason to ignore what the court wrote. (For example, who knew that Brushaber was an agent for foreign investors and *that* was why the Supreme Court ruled the way it did?)

Or the statement in Pollock about the source of Congressman Springer's income. It was from government bonds and Springer's law practice, both of which the TPs claim to be "excise taxable activities", whatever that's supposed to mean.

Neckbone