Hendrickson losses just keep mounting

[Demosthenes]

You know how Hendrickson likes to point out that the government has not prevailed on the merits in one of the cases against his followers?

Well, the court entered summary judgment in favor of the United States. The order and judgment are below.

http://www.cheatingfrenzy.com/fergusono.pdf
http://www.cheatingfrenzy.com/fergusonj.pdf

[jkeeb]

It would have worked if she had included the OMB argument and a copy of her IMF file showing she was a Virgin Island gun dealer. You cannot win if you don't include all of the arguments.

[jg]

The core of the dispute before the court is Ferguson’s assertion that she was not an “employee” as defined by §3401(c) of the Internal Revenue Code, and therefore did not earn any “wages.”1 As such, she argues that her Form 1040 and Form 4862 accurately reported her wages as zero. As noted by the government, Ferguson’s interpretation of §3401(c) has been considered and rejected numerous times by many courts. This Court would agree with the overwhelming precedent on this issue, Ferguson’s argument that she is not an employee as defined by §3401(c) is frivolous.

Ferguson raises other arguments, including: that the United States cannot bring this action; that the complaint failed to include a “short and plain” statement of the grounds upon which this court has jurisdiction; and several theories that the United States somehow conceded or waived its claims. Each of these arguments are as frivolous as Ferguson’s claim that she did not earn any taxable income in 2001 and 2002 because she was not an employee.

Once again the courts fail to address the arguments with detailed and copious counterpoint! So, of course, the LostHeads will continue to claim the government has not "showed them the law" when, in fact, the ruling in favor of the government is the show.

Isn't this the last of the seven suits that were all filed at about the same time so that Hendrickson's suit is the last of the batch to be decided?

[wserra]

And, in documents dated and docketed yesterday, Judge Edmonds denied Hendrickson's motion for relief from the judgment, and entered an amended judgment. Among other things, she found that "Defendant Peter Hendrickson was an employee of Personnel Management, Inc. in 2002 and 2003 within the meaning of IRC § 3401(c). Defendant Peter Hendrickson’s employer properly withheld federal income and employment taxes from his wages."

The judgment directs Hendrickson to repay the erroneous refunds, and permanently enjoins him "from filing any tax return, amended return, form (including, but not limited to Form 4852 (“Substitute for Form W-2 Wage and Tax Statement, etc.”)) or other writing or paper with the IRS that is based on the false and frivolous claims set forth in Cracking the Code that only federal, state or local government workers are liable for the payment of federal income tax or subject to the withholding of federal income, social security and Medicare taxes from their wages under the internal revenue laws (26 U.S.C.)."

Next installment: "Down in Flames in the Sixth Circuit".

[.]

Followed by "Cert denied" without comment.

[Demosthenes]

FOR IMMEDIATE RELEASE
TAX
WEDNESDAY, MAY 2, 2007

FEDERAL COURT BARS MICHIGAN AUTHOR OF TAX BOOK
FROM FILING FALSE TAX RETURNS AND FORMS

Commerce Township Couple Must Repay More Than $20,000 in Erroneous Tax Refunds

WASHINGTON — A federal court in Detroit has permanently barred Peter and Doreen Hendrickson of Commerce Township, Mich., from filing tax returns and forms on which they falsely report their income as zero, the Justice Department announced today. The injunction order, signed by U.S. District Judge Nancy G. Edmunds, also requires the couple to repay more than $20,000 in federal income, Social Security and Medicare taxes that they had obtained by filing false tax returns with the IRS.

The order notes that the couple based their improper conduct on a book Peter Hendrickson wrote called Cracking the Code. The book states that federal tax withholding and income taxes on wages are applicable only for a limited class of people, primarily government employees. The court found that position to be “false and frivolous,” and cited an earlier court decision holding the position to be “preposterous.”

Based on advice in Hendrickson’s book, individuals have unlawfully filed tax returns with false substitute W-2 wage statements they prepare reporting little or no wage income. They also fail to submit the correct W-2 wage statement they receive from their employers. Hendrickson’s scheme is number five on the IRS’s 2007 list of the “Dirty Dozen” tax scams, posted at http://apps.irs.gov/newsroom/article/0, ... 83,00.html .

The Justice Department sued the Hendricksons and seven others last year in suits filed in California, Nevada, Michigan, Alabama, Kansas and Florida, seeking to recover erroneous tax refunds that the nine defendants had received as a result of acting on the advice in Hendrickson’s book. The government has now prevailed against all nine defendants. Information on those suits is available at http://www.usdoj.gov/tax/txdv06219.htm .

Peter Hendrickson was convicted in 1992 on federal criminal charges for failing to file a federal income tax return and for a conspiracy involving a firebomb placed in a bin at a U.S. Post Office in Royal Oak, Mich. on April 16, 1990, the last day on which tax returns could be postmarked that year. Hendrickson testified at a co-conspirator’s trial that he wrapped a tea bag around the bomb’s tubing as a reference to the Boston Tea Party tax protest.

Since 2001, the Justice Department has obtained injunctions against more than 235 tax fraud promoters and fraudulent return preparers. More information about the Justice Department’s efforts to stop tax scams can be found at http://www.usdoj.gov/tax/taxpress2007.htm . Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax .

[grammarian44]

We are winning this battle in court and pressing their retreat to the next level.

And, in documents dated and docketed yesterday, Judge Edmonds denied Hendrickson's motion for relief from the judgment, and entered an amended judgment. Among other things, she found that "Defendant Peter Hendrickson was an employee of Personnel Management, Inc. in 2002 and 2003 within the meaning of IRC § 3401(c). Defendant Peter Hendrickson’s employer properly withheld federal income and employment taxes from his wages."

The judgment directs Hendrickson to repay the erroneous refunds, and permanently enjoins him "from filing any tax return, amended return, form (including, but not limited to Form 4852 (“Substitute for Form W-2 Wage and Tax Statement, etc.”)) or other writing or paper with the IRS that is based on the false and frivolous claims set forth in Cracking the Code that only federal, state or local government workers are liable for the payment of federal income tax or subject to the withholding of federal income, social security and Medicare taxes from their wages under the internal revenue laws (26 U.S.C.)."

Any response, Mr. Bulten? Do you consider the above holdings to exemplify "winning"? If so, you have a very curious definition of victory. Or is it that when you said "we," you were referring to someone other than Pete Hendrickson, the man whose writings you treat with a degree of reverence most people reserve for the Bible or the Koran?

[1 of Them]

So when's the book burning party for his little piece of fiction??

When's the evil gov't gonna stop his book selling cash cow? Or are they ever gonna?

[Joey Smith]

John Bulten's alter ego:



We are defeating the IRS infidels even now, and driving them back to their hovels on Pennsylvania Avenue!

[Joey Smith]

Oh, and also it is funny how Pete's latest catastrophic defeat isn't discussed AT ALL on the LostHead's forum.

Head-Sand-Stick

[silversopp]

Wow...I feel really dumb.

I never realized that this is the same Pete Hendrickson that tried to blow up the Royal Oak Post Office! It is really scary that he has himself a cult following now.

[John J. Bulten]

OK I found this thread late.

My first impression is that no one has posted the court's reasoning. In Joy's case I see: "As noted by the government, Ferguson’s interpretation of §3401(c) has been considered and rejected numerous times by many courts." So it defers to whatever the government said Joy said, which I suspect is not what she said. Similarly in Pete's case I see: "the false and frivolous claims set forth in Cracking the Code that only federal, state or local government workers are liable for the payment of federal income tax or subject to the withholding of federal income, social security and Medicare taxes from their wages under the internal revenue laws". Since that claim does not appear in CtC (although I've seen a briefing where that conclusion is wrested out of a single offending sentence without its context), Pete will have no problem. Again, since the ruling is not based on what Pete said, but on what they said he said, it is just as reversible as Joy's. But I recognize that it might longer than the appeals process for the truth to sink in.

If anyone would like to post the government's reasoning in Joy's case, or any of the full documents in Pete's case, I'm still looking for them. And silversopp, please read the P.S. at http://www.losthorizons.com/Lawsuit.htm and tell us what you think.

[Demosthenes]

Hendrickson Order denying Motions for Relief from Judgment:

http://www.cheatingfrenzy.com/hendrickson33.pdf

Hendrickson Amended Judgment and Permanent Injunction:

http://www.cheatingfrenzy.com/hendrickson34.pdf

[Nikki]

The court's reasoning is simple: Pete's theories and arguments were frivolous and he lost.

Don't try to read into this anything which isn't there.

Pete lost. He lost BIG in the sense that he's been enjoined to never file a tax return using CtC logic again.

If you want to twist that decision into a win, go for it.

Just remember that cooperating with the civil side of the IRS is a fairly effective way of keeping CI off your case.

You might still have a chance to avoid jail, if you can read the writing on the wall and on the court orders.

[Dr. Caligari]

Similarly in Pete's case I see: "the false and frivolous claims set forth in Cracking the Code that only federal, state or local government workers are liable for the payment of federal income tax or subject to the withholding of federal income, social security and Medicare taxes from their wages under the internal revenue laws". Since that claim does not appear in CtC (although I've seen a briefing where that conclusion is wrested out of a single offending sentence without its context), Pete will have no problem.

The judge ruled that "Defendant Peter Hendrickson was an employee of Personnel Management, Inc. in 2002 and 2003 within the meaning of IRC [sec] 3401(c)." (Final Judgment, paragraph 19). Sounds like game, set and match to me (subject, of course, to Hendrickson's right to appeal. Care to place a side bet on the outcome of that appeal?)

[John J. Bulten]

Since we've been talking about cutting context from quotes, Judge Nancy provided two great examples. First:

To whatever degree the statutes invoked or relied upon by Plaintiff and the Court can be construed to provide for such an injunction and coercion of testimony those statutes are unconstitutional, being plainly violative of at least the "necessary and proper" clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution.

http://www.losthorizons.com/PostMotionF ... ration.pdf

The only new argument is that "the statutes invoked or relied upon by Plaintiff and the Court ... are unconstitutional, being plainly violative of at least the 'necessary and proper' clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution."

The second one was handed to her by the AUSA, where the CtC page 76 sentence was similarly quoted without context, which context I'll provide when I can grab my copy. Nikki, Pete was enjoined not to file using a logic which is not in CtC (although that logic can be read into that one sentence of it devoid of its context). It is not Pete's theory or argument that was frivolous or lost. Pete is still free to file according to any lawful argument in CtC. (Except for the fact that:)

The court's key sentence I was looking for was "The amended tax returns to be filed by Defendants shall include, in Defendants' gross income for the 2002 and 2003 taxable years, the amounts that Defendant Peter Hendrickson received from his former employer, Personnel Management, Inc., during 2002 and 2003, as well the amounts that Defendant Doreen Hendrickson received from Una E. Dworkin during 2002 and 2003." Of course I would expect that Pete has a right to have an appeal heard prior to obeying the order. Since Pete does not hold the position attributed to him, and wrested from one sentence of CtC out of context, I would continue to hold this judicial error is remediable, along with all the findings the Court made relying upon it.

But, as a reasonable person, I would certainly admit the difficulty that such minor challenges create for following one's convictions.

[Florida]

Since we've been talking about cutting context from quotes, Judge Nancy provided two great examples. First:

To whatever degree the statutes invoked or relied upon by Plaintiff and the Court can be construed to provide for such an injunction and coercion of testimony those statutes are unconstitutional, being plainly violative of at least the "necessary and proper" clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution.

http://www.losthorizons.com/PostMotionF ... ration.pdf

The only new argument is that "the statutes invoked or relied upon by Plaintiff and the Court ... are unconstitutional, being plainly violative of at least the 'necessary and proper' clause of the eighth section of Article One, and the First, Fifth, Seventh, Ninth, and Tenth Articles of Amendment to the U.S. Constitution."

The second one was handed to her by the AUSA, where the CtC page 76 sentence was similarly quoted without context, which context I'll provide when I can grab my copy. Nikki, Pete was enjoined not to file using a logic which is not in CtC (although that logic can be read into that one sentence of it devoid of its context). It is not Pete's theory or argument that was frivolous or lost. Pete is still free to file according to any lawful argument in CtC. (Except for the fact that:)

The court's key sentence I was looking for was "The amended tax returns to be filed by Defendants shall include, in Defendants' gross income for the 2002 and 2003 taxable years, the amounts that Defendant Peter Hendrickson received from his former employer, Personnel Management, Inc., during 2002 and 2003, as well the amounts that Defendant Doreen Hendrickson received from Una E. Dworkin during 2002 and 2003." Of course I would expect that Pete has a right to have an appeal heard prior to obeying the order. Since Pete does not hold the position attributed to him, and wrested from one sentence of CtC out of context, I would continue to hold this judicial error is remediable, along with all the findings the Court made relying upon it.
But, as a reasonable person, I would certainly admit the difficulty that such minor challenges create for following one's convictions.

Looks like you'll be on hold for a while buddy.

[Demosthenes]

Wednesday, May 02, 2007
Print this Comment on this E-mail this

Judge bars tax protester from filing returns

Paul Egan / The Detroit News

A Commerce Township man who has become nationally known for promoting the idea that only government employees are required to pay federal taxes was handed a setback Wednesday in U.S. District Court in Detroit.

Judge Nancy G. Edmunds issued a permanent injunction barring Peter Hendrickson, 51, and his wife, Doreen, from filing tax returns and forms in which she said they falsely report their income as zero.

Edmunds, who dismissed the Hendricksons' interpretation of the law as "false and frivolous," also ordered the couple to repay more than $20,000 in federal income, Social Security and Medicare taxes she said they had obtained by filing false tax returns with the Internal Revenue Service.

"Defendants will not be harmed by the entry of an injunction against them because they will only be required to obey the law," Edmunds said.

Hendrickson, who represented himself in the civil suit brought by the U.S. Justice Department, said he will appeal the order. He said he fills out his tax forms truthfully and accurately and for Edmunds to order him to fill them out differently amounts to witness tampering or suborning perjury.

"This is a very significant issue," he said.

Hendrickson promotes his tax ideas in his book, Cracking the Code-- the Fascinating Truth About Taxation in America.

The IRS includes Hendrickson on its "Dirty Dozen" list of tax scams featured on its Web site.

The Justice Department said in a news release Wednesday that an unspecified number of Americans around the country have filed false tax returns based on Hendrickson's teachings.

In 2006, the department filed lawsuits against the Hendricksons and seven other tax filers in Michigan, Nevada, Alabama, Kansas and Florida, seeking to recover erroneous tax refunds. The government has now prevailed against all nine defendants, the news release said.

Hendrickson was convicted in 1992 on federal criminal charges for failing to file a tax return and for a conspiracy involving a firebomb placed in a bin at a post office in Royal Oak on April 16, 1990. Hendrickson testified he wrapped a tea bag around the tubing of the bomb in reference to the famous Boston Tea Party tax protest that precipitated the Revolutionary War.

[grammarian44]

We are winning this battle in court and pressing their retreat to the next level.

John, in the above quotation, you didn't predict that you would be able to find something to disagree with in the court's opinion. I never doubted that you would be able to find something to disagree with. What you predicted was VICTORY.

And CtC lost in the only forum that counts--a court of law.

Are you even capable of admitting that the above quotation was incorrect?

I said before that you and other CtC folks are mistaken fundamentally about pressing your case for change by arguing that the law already excludes wages from taxation. Now that the decision has gone against Pete and unquestionably repudiated your entire logic, you respond by trying to disagree with the court's reasoning, as if that could possibly matter now.

Who cares whether you disagree? What matters is that you lost, when you thought and stated flatly that you would win.

Unless a higher court overturns this decision--and I am certain no court will--the court's holding IS the law. The only possible way to have a legal system is for some group of people, somewhere, to decide what the law means. In our system we use courts decide what the law means. The court decided Pete is wrong. Therefore, Pete is wrong. And so are you.

[Dr. Caligari]

Of course I would expect that Pete has a right to have an appeal heard prior to obeying the order.

Your expectation may be disappointed. Under Rule 62 of the Federal Rules of Civil Procedure and Rule 8 of the Federal Rules of Appellate Procedure, an injunction must be obeyed while it is being appealed, unless the district court or the Court of Appeals orders otherwise; and a money judgment can be enforced while it is on appeal unless the defendant posts a bond, or the court grants an unsecured stay.