Another Hendrickson follower has doubts

[Famspear]

A relatively new user called Artus Register has created a new thread at losthorizons entitled Wondering if filing CtC was a good idea after all..., and on 7 January 2009, he writes:

Let me start by saying that I have no desire to submit to leviathan, and would certainly like to continue the fight, if possible. But the jackboot is getting heavy.

We refiled my wife's '05 return CtC and received a refund of all withholding, minus SS and Medicare, etc. The letter w/the refund check was somewhat confusing (at the time) and stated that the Service had made changed [sic] to the return. In retrospect, I should have responded to that right away, but the excstacy [sic]that the incorrectly withheld funds were returned seemed to cloud my judgment.

That's not the only thing that clouded your judgment, dude....

He continues:

About 4 months later we received a letter stating that the returning of the funds was incorrect, and that they wanted the money back. We also filed a CtC return correcting the incorrect withholding for '06.
Regarding the '05 situation we have had a good deal or "correspondence" basically consisting of me citing the law, as written, and the Service ignoring my citations and issuing form letters explaining that:

A) They need time to look into it and
B) I'm wrong, sans any replies or corrections to my lawful position

The reply to the CtC return for '06 was that the position was frivolous, and the follow-up received a few days ago was an unsigned "You have been charged a penalty under Section 6702..." of the $5K variety. The letter states--as many of you probably know--that in order to contest the assertion of the penalty, it must first be paid and we must file a claim for refund! That doesn't even give the illusion of due process! My understanding from reading posts here is that such letters to [sic] not constitute a true penalty having been assessed[,] as such letters must be signed, and that only after managerial approval.

Your understanding is wrong. For example, the letters do not have to be "signed." And the "letters" do not constitute a "penalty"; the penalty constitutes a penalty.

At the end of the year I received a letter re: '06 correction adding an unexplained $2500+ "Increase in tax because of this change," as well as interest charged.

My letters to the Service up to this point have been lather [sic] restrained referenced [sic] to the laws in the IRC defining wages, etc. and again, have been met with no reply other than threats and form letters.

At this point I have no idea why additional amounts allegedly owed have been added, or how to craft a response that will get me a reply. Is there any known method by which I can receive a detailed response as to what the Service obtusely claims we owe--as in a breakdown?

Also, has anyone had any luck with letters cc'd to their Congressman, Senators, Treasury Secretary, etc?

Has anyone had any luck if situations similar to ours where monies have been reclaimed by CtC methods, and then demanded back?

Has anyone been able to have the Service's claim of "frivolous claim" reversed?

I don't know what to do at this point. It seems CtC works until it doesn't. I am in complete agreement with the CtC claims as to what legally constitutes "wages," etc. but it seems that the powers that be simply ignore the law similar to the way Congress ignores the Constitution.

Continuing to cite the law that is a clear defense of my legal position seems to do nothing but waste paper. Has anyone found an approach that actually garners a reply in anything but form letters?

These are my wife's returns and she is really starting to panic. I have continually assured her that the law is clear, and is on our side, but thus far things have gotten much worse than before we started this process.

I am pretty desperate for some feedback. Please!

(bolding added)

http://www.losthorizons.com/phpBB/viewtopic.php?t=1269

EDIT: I like this; this is a classic:

It seems CtC works until it doesn't.

[Famspear]

Looks like Artus Register "registered" at losthorizons over a year ago, but this was his first post.

[Doktor Avalanche]

Looks like Artus Register "registered" at losthorizons over a year ago, but this was his first post.

I'm taking that line about CtC as my sig.

[Famspear]

Looks like Artus Register "registered" at losthorizons over a year ago, but this was his first post.

I'm taking that line about CtC as my sig.

(chuckle). It's a line that's so true and yet so funny.

Bank robber: "It seemed that this bank robbery thing worked -- until I got caught..."

[absdes96]

Famspear,

Just trying to get acquainted with the acronyms used on this forum. What is CtC?

Thanks....

[Famspear]

"CtC" is the book Cracking the Code, by Peter Eric Hendrickson. He came out with it in 2003, I believe. See his web site, http://www.losthorizons.com.

It's a tax evasion scam. Not a very original one, either. Hendrickson's basic argument is that terms like "wage" and "employer" and "employee" and "includes" have certain special meanings that those terms do not really have. He argues -- basically -- that most "private sector" compensation for personal service is not a "wage" and is not taxable. His argument is that for compensation to be taxable, it must basically be somehow connected to an "activity" involving a "federal privilege." It's a statutory law argument (not a constitutional law argument). And it's completely without any legal merit whatsoever.

Regarding my earlier comment, I should say that the quote from ArtusRegister is so true, yet so funny, yet so sad. This guy has pulled his wife into the mess. Still another example of how this kind of scam grows like a cancer.

[absdes96]

It seems this promoter's book is another concoction of ideas similar to those of Irwin Schiff, Lynne Meredith, Otto Skinner, etc.?

[The Observer]

At this point I have no idea why additional amounts allegedly owed have been added, or how to craft a response that will get me a reply. Is there any known method by which I can receive a detailed response as to what the Service obtusely claims we owe--as in a breakdown?

Continuing to cite the law that is a clear defense of my legal position seems to do nothing but waste paper. Has anyone found an approach that actually garners a reply in anything but form letters?

I find this to be a recurring theme in TP strategy; it appears that Artus is starting to see the tip of that particular iceberg: that the real aim of CtC, like other TP scams, is to delay the inevitable. So if you can come up with a way to entangle the government in a morass of never-ending correspondence, phone conversations, claims, appeals, lawsuits, etc. you will never have to pay. Either the government will give up in frustration or the statute will lapse before you have to fork over your dollars. Of course this is never discussed as a specific tactic, since you are not going to be able to rake in the dollars from your marks if they understand they are signing up for a 10+ year battle with the feds over a tax liability. And I might add, an expensive battle since you will have to do a lot more than just waste paper to hold the collectors off. And one further thing to keep in mind is that the governmen doesn't have to play the waiting game if it doesn't want to - just ask those TPS who found themselves being dragged into court to face foreclosure of their property.

[LPC]

Looks like Artus Register "registered" at losthorizons over a year ago, but this was his first post.

I'm taking that line about CtC as my sig.

(chuckle). It's a line that's so true and yet so funny.

Bank robber: "It seemed that this bank robbery thing worked -- until I got caught..."

Exactly.

Hendrickson has convinced his marks that the refunds that the "CtC method" produces are proof of the lawfulness of the returns, but that conscious, deliberate decisions of the IRS (such as frivolous return penalties) and the courts (such as the judgment against Hendrickson himself) should be ignored disregarded.

Most of the Crackheads don't seem to be able to understand/accept/admit that even an out-and-out fraud can generate a refund, and that CtC returns are frauds that are simply good enough (so far) to generate refunds.

[LPC]

It seems this promoter's book is another concoction of ideas similar to those of Irwin Schiff, Lynne Meredith, Otto Skinner, etc.?

Yes and no. Some of their ideas are similar, and some are different.

Two resources you might want to check out if you haven't already:

1. My "Tax Protester FAQ," which attempts to describe and debunk just about every tax protester argument; and

2. My "Tax Protester Dossiers," which attempts to document the "careers" of some of the more notable promoters and "big fish."

[LPC]

Regarding the '05 situation we have had a good deal or "correspondence" basically consisting of me citing the law, as written, and the Service ignoring my citations and issuing form letters explaining that:

A) They need time to look into it and
B) I'm wrong, sans any replies or corrections to my lawful position

Sometimes the only logical response is "you're wrong."

If someone says that the earth is flat, or the sun revolves around the earth, what is there to say by "you're wrong."

Like most other tax denial theories, CtC is based on the premise sections 61, 3041(c), and 7701(c) don't mean what they say. A perfectly proper, logical, and concise answer is "you're wrong."

My understanding from reading posts here is that such letters to [sic] not constitute a true penalty having been assessed[,] as such letters must be signed, and that only after managerial approval.

Your understanding is wrong. For example, the letters do not have to be "signed." And the "letters" do not constitute a "penalty"; the penalty constitutes a penalty.

Tax protesters frequently confuse notice of a thing with the thing itself. So, for example, some claim that a notice of tax lien is ineffective, and the government must issue an actual lien and not just a notice of a lien. But a lien is a legal interest in property and not a piece of paper.

I hadn't yet seen this confusion extend to the word "penalty."

My letters to the Service up to this point have been lather [sic] restrained referenced [sic] to the laws in the IRC defining wages, etc. and again, have been met with no reply other than threats and form letters.

Tax protesters also can't tell the difference between a "threat" and a "notice."

Has anyone had any luck if situations similar to ours where monies have been reclaimed by CtC methods, and then demanded back?

I'm not going to hold my breath waiting for Hendrickson to answer this one.

(Another problem with tax protesters is that they have no sense of irony. "Gee, how do we defend ourselves against the IRS demands for returns of refunds? I know, let's ask Pete!")

[LPC]

It's a statutory law argument (not a constitutional law argument).

But it has a constitutional underpinning.

Like most tax deniers with statutory arguments, PH also claims that his statutory interpretation is necessary in order for Congress to stay within its constitutional limits, because Congress has no power to tax anything not connected with a "federal activity" of some sort.

The introduction to "Cracking the Code" that is posted on Hendrickson's website starts with a discussion of constitutional apportionment and concludes that:

[The federal income tax] amounts, in its actual application, to a tax on only a specialized subset of the larger class of income, consisting exclusively of revenues attributable to the voluntary, profitable use of federal privilege, property or powers--that is, revenues in which the federal government has a direct ownership interest, and to which it can therefore exercise a direct claim as a matter of right.

Hendrickson repeated essentially the same argument in a memo attached to his brief to the 6th Circuit.

This kind of "reasoning" is not unusual. Larken Rose took a somewhat similar position, claiming that the federal income tax *had* to be limited to foreign income, because it would otherwise be unconstitutional, and that any language in the IRC or regulations that was inconsistent with his theories was inserted with the intent to deceive.

[ASITStands]

And, don't forget his theory that a tax on "income" is a capitation in that it's imposed on a special species of revenue, or his theory the taxpayer has the final word on the subject.

[Famspear]

User "gdude" at losthorizons responds to ArtusRegister's desperate plea for "feedback":

Read these:

http://www.losthorizons.com/EveryWhichWayButLoose.htm

http://www.losthorizons.com/Help.htm#HelpII

http://losthorizons.com/phpBB/viewtopic ... c&start=30

http://www.losthorizons.com/comment/arc ... erfuge.htm

Get a FOIA letter together ,so you can find out what the IRSS is doing with your returns. Oh, and always answer their correspondence. Not legal advise [sic]...

http://www.losthorizons.com/phpBB/viewt ... 1666#11666

No, not legal "advise." Not legal advice, either.

And, except for the advice that correspondence from the IRS should be answered, not very good advice, either.

Pretty useless advice, actually.

Actually, it's pretty much a "non-responsive response." Reading more and more of PeterEricBlowhard Meister Hendrickson's nonsensical blather ain't gonna help ya, "ArtusRegister".

[Famspear]

Patrick Michael Mooney has posted a comment in the thread:

Dear Artus,

I understand your panic and frustration about the wall of resistance you are experiencing with the Feds. I've been dealing with that wall since 2004, and will continue to deal with it until we change the culture of how people view the Federal Government in this country.

(bolding added)
http://www.losthorizons.com/phpBB/viewtopic.php?t=1269

Well, you might be dealin' with "the wall" for a long, long time, Patrick.

Patrick continues:

I don't know the specifics of your situation for '05, and whether your agreement to their "revised changes" compromised the truthfulness of your return in any way. If it did, you may have to cut that year away and chalk it up to a painful learning experience.

If it did not, then you must press on in the defense of that claim, and any other claim you make using CTC-informed judgment.

That means dealing with the letter-writing campaign that goes back and forth between you and the Service. It also means that you must be willing to press your case in the courts at some point.

Try not to be intimidated by that. The Tax Court most likely won't see things your way, but going there will prove to the higher Courts that you have exhausted all "administrative remdies" in your case, which will force them to deal with your case.

That means evidence counts in that forum....and this is where the government will ultimately lose. I've gone through the Tax Court once, and most likely will be there again later this year to defend another year's filing. I'm also on the docket with the District Court and am awaiting a ruling from them any time now.

Mooney lost his Tax Court case. He is on appeal at the Court of Appeals for the Fourth Circuit. I don't know what the reference to the "District Court" is about.

Patrick goes on:

Bottom line....IRS letters are an annoyance, but almost all of them are legally baseless allegations. Be vigilant and keep swatting them away until you win the day. They are counting on you to get "tired" before that happens.

You will definitely get tired before you ever "win the day" with the IRS by using a tax protester scam, and Hendrickson's Cracking the Code is a scam.

Patrick waxes philosophical:

Just breathe and stay in the fight. To quit now would leave a scar on your soul...and you know it.

A scar upon your soul? You people at losthorizons.com are engaged in a criminal enterprise and a group delusion. You better stop worrying about the scar on you soul that would be caused by getting out of your mess and start worrying about the potential scars on your pocketbooks and on your freedom if you persist.

Remember all the evil that the Feds are accomplishing with your money. Use that as a motivation to keep up your fight for the rule of law.......

Hendrickson's scam is not the "rule of law." And the fact that there are evils that the federal government accomplishes with your money is not a rational -- or legal -- or moral -- justification for what Hendrickson and his followers are doing.

[Famspear]

Another user, MN Stix, writes:

Right on Patrick! I wanted to address this but really came up with nothing.

I just wanted to say that those here with regrets for filing correctly, do not regret! Never back down from these people, and never change your testimony. Do not even hint that you may be willing to do so.

Your eventual victory, is not a victory for yourself. It is a victory for the people, more importantly, the future of your children. If we crawl back to submissive position, our future as a free people will be doomed to history. That is not a future I want for my kids, or any children for that matter. It is not about me anymore, I have already lived most of my life as a slave and will not allow the same for future generations.

(bolding added).

I am not a psychologist, but this language (especially the material I bolded) does not appear to me to be the product of a psychologically normal person.

Submissive position? Lived your life "as a slave"??? We're talking about paying taxes here. Get a grip on yourself.

[absdes96]

It seems this promoter's book is another concoction of ideas similar to those of Irwin Schiff, Lynne Meredith, Otto Skinner, etc.?

Yes and no. Some of their ideas are similar, and some are different.

Two resources you might want to check out if you haven't already:

1. My "Tax Protester FAQ," which attempts to describe and debunk just about every tax protester argument; and

2. My "Tax Protester Dossiers," which attempts to document the "careers" of some of the more notable promoters and "big fish."

LPC,

I checked out your site. I think I may have come acrossed it before, but it is certainly a vault for information on this subject. Without doubt, a great resource for any student on the "exciting" subject of Federal Income Taxes. The parallel you drew between Tax Protesters and Cults was a little sobering.

I finished a course in Federal Income Taxation toward my CFP just several months ago and, surprisingly, much of what I am reading on Tax Protesting is making sense to my otherwise very slow brain.

After skimming through some of the attached links you and others have posted, it seems that this CtC scheme is a campaign to 1) slice and obscure language used in the section codes of 26 USC and 2) to push paper back and forth with IRS with the hope/promise that they will give up on the person.

So is Hendrickson and his crew banking on administrative inefficiencies in the IRS for the success of the scheme?

How long does the IRS or USDOJ allow a scheme to proliferate until they put the "smack-down" on it? It seems this one has been running for 4-5 years. There has to be someone or some department in the IRS (the CID?) who monitors these patterns and verbiage used in these letters as they are written in a boilerplate/cookie cutter fashion.

[Lambkin]

So is Hendrickson and his crew banking on administrative inefficiencies in the IRS for the success of the scheme?

How long does the IRS or USDOJ allow a scheme to proliferate until they put the "smack-down" on it? It seems this one has been running for 4-5 years. There has to be someone or some department in the IRS (the CID?) who monitors these patterns and verbiage used in these letters as they are written in a boilerplate/cookie cutter fashion.

Hendrickson is currently experiencing the "smack-down". It is like a slow-motion train wreck. At first he is pretty sure the train is still on the tracks. Then there is a sensation of floating for a while. Hendrickson hasn't quite arrived at the touch-down point yet but (unless he pulls off an acquittal) it promises a spectacular wipe-out.

[Famspear]

Going back and reading the "ArtusRegister" post at losthorizons. reproduced at the beginning of this thread, one thing that strikes me is how curious it is that someone who presumably has been reading the posts in the losthorizons forum for some time could still be shocked and flabbergasted that he is now having the same trouble with the frivolous penalty notice from the Internal Revenue Service that so many other losthorizons posters have had. It's as though each new lamb to the slaughter just doesn't believe that what has already happened to other followers of Peter Hendrickson could possibly happen to him.

It's as though the CtC newcomers are standing at the side of huge pit of quicksand. The newcomers are having conversations with the many CtC old timers ("Hendrickson's Heroes") already stuck in the quicksand. Various old timers are at various stages in the process of sinking. Some people, like Peter Hendrickson, are already stuck up to their chins. Others are stuck only up to their shoulders. Still others are in only up to the waist, or the knees, and newcomers who just jumped in are stuck just by the ankles. Some people have not jumped in. They are standing outside the pit, listening to the conversations of the various "stuckees," and debating whether to jump in themselves.

Almost all of Hendrickson's Heroes are saying to each other:

"No, no, this is not really a problem for us, even though it may appear -- to those who are not CtC educated as we are -- that we're stuck; we know that we're going to get out of this, because everything the Evil Government has told us about the Law of Gravity and the Effect of Quicksand is false. According to our rules, the Law of Gravity and the Effect of Quicksand MUST EVENTUALLY YIELD to Hendrickson's Truth, if only we keep flailing around in this quicksand. But we need to get more and more people to step into the pit. If enough people jump in, then the whole mindset of the country will change, which will mean victory for us."

Although no Hendrickson Hero has actually ever seen anyone pull himself out of the pit of quicksand, each Hero (each "stuckee") keeps telling every other "stuckee" that Hendrickson's Truth is working and that the Law of Gravity has been defeated.

Sometimes a "stuckee" will suddenly drop from an ankle-deep "stuckness" to a knee-level "stuckness", or to a "waist-level" stuckness. Example: Patrick Michael Mooney, when he lost his Tax Court case. People like Mooney often respond to the worsening predicament with something like: "Oh, but the fact that I sank lower into the quicksand just confirms that Hendrickson's Truth is the real truth, and that the Law of Gravity, etc., is wrong."

Once in a while, a Hero's head finally drops below the surface, and does not re-emerge. The other Hendrickson Heroes studiously ignore this event for as long as possible -- until a Doubting Thomas in the pit points out that Hendrickson's Heroes have lost another patriot. The majority of the Heroes respond with something like "Oh, but the guy who sank out of sight didn't follow Hendrickson's game plan in just the right way; the guy didn't follow through; he gave up; he didn't state Hendrickson's Truth perfectly. The fact that he sank out of sight does not discredit Hendrickson's Truth in our eyes. Therefore, we will continue to flail and struggle in this quicksand UNTIL WE PREVAIL against the Law of Gravity and the Effect of Quicksand....."

[grixit]

Suddenly i have this urge to reread Inferno.