Hendrickson hearing, motion to dismiss indictment

[Prof]

Wow Evans you drawl quite a few conclusions about me personally based on lets see, NOTHING.
One can tell someone has nothing of value to say or cant prove their point if they are calling people names. I wont respond to any such posts, so keep it civil.

From the Lost Horizons forum on 1/15/2009, from a thread titled "Daniel B. Evans: The Tax Protest FAQ":

If you actually read what he writes with a keen eye you will find he is nothing more than a shill repeating IRS mantras ladden with definded terms that he never defines.

I draw conclusions from what people write, and I call a spade a spade.

The conclusion I draw from what you've written above is that you are a hypocrite.

Yup you busted me being a hypocrite. I have read some of your stuff in the past and do think some of it is just word games.
However, i am going to re read some(cos theres alot) of it and redraw my conclusions. Everyday I learn more about the law and why people are wrong in their conclusions. You will note I chastised someone for posting something on a common law jury. Which I find to be an oxymoron considering its judges and jurists not juries that create the common law.
In other words I am attempting to learn and keep an open mind
Now if willfullness is not an affirmitive defense then what kind would it be. I mean you are affirming something there. Whats the test for being affirmitive?

"I was not willful" is a defense to a charge, not an affirmative defense. Affirmative defenses are defenses which the defendant must plead or may be deemed to have waived. Those include, on the civil side, some of the matters that must be plead as set out at Rules 8 and 12 of the FRCivPro -- such as limitations, assumption or risk, or lack of personal service, defects in service, etc. Other civil affirmative defenses include accord and satisfaction, arbitration and award, contributory negligence, and so on. At state law, affirmative defenses may include pleadings defects, such as failure to verify a pleading required at state law.

In the criminal context, see F.R. Crim Pro. 12 and other sources, such as F Rule Crim Pro 12.2 and FR Evidence 702, which govern the affirmative defense of insanity. See other provisions of Crim Rule 12, including 12.3, for example, governing an affirmative defense of actions with public authority. Wes Serra can give you a better analysis, but I think it correct to say that the burden of pleading affirmative defenses rests more heavily in civil than in criminal contexts.

The burden on the government in criminal cases is to prove the allegations in the indictment beyond a reasonable doubt. The Defendant can remain silent and offer no defense at all and still be found not guilty by the judge (failure to meet the burden) or jury (failure to convince the jury beyond a reasonable doutbt).

(As my responses might suggest, I am a civil trial/bankruptcy lawyer, not a criminal defense lawyer and not a tax lawyers, although I've tried a lot of tax matters in civil courts over the years. I defer to Wes on criminal matters and to the tax experts, like Mr. Evans [to whom we all defer] or Famspear or Dr. C or others on tax questions. Imalawman is, for one example, currently taking an advanced law degree, an LLM, in taxation.)

[LPC]

Second, regarding your quote above: Can you show me one case ever decided by any federal court anywhere which held that income must be "connected to a federal privilege"? Just one?

No but PHs has a SCOTUS case or two in CtC that shows the income tax is an excise

There are some cases that describe the income tax as an "excise." The first real income tax case, Springer, described the income tax as an "excise or duty."

There are other Supreme Court cases holding that whether a tax is described as an excise, a duty, an impost, or a tax is irrelevant (Chas. Steward Machine), and that the constitutional power to tax was intended to give Congress the power to tax was intended to be the broadest possible power, within only one exclusion (exports) and two restrictions (apportionment and uniformity).

and all excises are on a priviledge. True or false?

There is no court opinion saying that ALL excises must be imposed ONLY on "privileges."

ONE DEFINITION of "excise" is a tax on a "privilege," but there are other definitions.

What Hendrickson is doing is playing word games, taking a sentence from one opinion and another sentence from another opinion and jamming them together to form a conclusion which has nothing to do with what the court was deciding in either case.

thus "income" must be connected to a federal priviledge

Even assuming that an excise must be imposed on a "privilege," there is no authority whatsoever for the proposition that the privilege must be "federal."

For example, in Flint v. Stone Tracy (1911), a federal tax on the incomes of corporations, enacted before the adoption of the 16th Amendment in 1913, was challenged because the federal government was taxing the "privilege" of operating a business under state corporate charter. The Supreme Court stated that "While the tax in this case, as we have construed the statute, is imposed upon the exercise of the privilege of doing business in a corporate capacity, as such business is done under authority of state franchises, it becomes necessary to consider in this connection the right of the Federal government to tax the activities of private corporations which arise from the exercise of franchises granted by the state in creating and conferring powers upon such corporations. We think it is the result of the cases heretofore decided in this court, that such business activities, though exercised because of state-created franchises, are NOT beyond the taxing power of the United States." (Emphasis added).

I suggest you read the Flint decision and see if you can find anything in there, or in any other decision that Hendrickson cites, that would support the conclusion that Congress cannot tax anything but the exercise of a "federal privilege."

[LPC]

ive an idea why doesnt someone do an analysis of CtC and I mean a legal this is why as a matter of law PHs is wrong and I ll post it at lost horizons.

There are lots and lots of incorrect assertions in what I've read by Hendrickson. The two biggest errors are:

1. His belief that the definition of "wages" in section 3401 has anything to do with the determination of "taxable income." The definitions of "wages" (and "employee") in section 3401 state expressly that they are "for purposes of this chapter.” Section 3401 is in Chapter 24 of the Internal Revenue Code, which is titled “Withholding of Tax on Wages at Source.” So proving that you are do not have "wages" or are not an “employee” within the meaning of section 3401 would only mean that your compensation is not subject to withholding. Your compensation would still be included in gross income as defined by section 61, and in taxable income as defined by section 63, because those sections are in Chapter 1 of the Internal Revenue Code, not Chapter 24. (Sections 61 and 63 also do not use the words "wages" or “employee.”)

The distinction between "wages" and "income" was expressly recognized by the Supreme Court in Central Illinois Public Serv. Co. v. United States, 435 U.S. 21, 25 (1978), which held that lunch money paid to employees was "wages" subject to withholding. The court had previously held that lunch money was income subject to tax (Commissioner v. Kowalski, 434 U.S. 77 (1977)), but that the issue of whether the lunch money was "wages" was different:

The income tax issue is not before us in this case. We are confronted here, instead, with the question whether the lunch reimbursements, even though now they may be held to constitute taxable income to the employees who are reimbursed, are or are not "wages" subject to withholding, within the meaning and requirements of 3401-3403 of the Code, 26 U.S.C. 3401-3403 (1970 ed. and Supp. V). These withholding [435 U.S. 21, 25] statutes are in Subtitle C of the Code. The income tax provisions constitute Subtitle A.

The income tax is imposed on taxable income. 26 U.S.C. 1. Generally, this is gross income minus allowable deductions. 26 U.S.C. 63 (a). Section 61 (a) defines as gross income "all income from whatever source derived" including, under 61 (a) (1), "[c]ompensation for services." The withholding tax, in some contrast, is confined to wages, 3402 (a), and 3401 (a) defines as "wages," "all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash." The two concepts - income and wages - obviously are not necessarily the same. Wages usually are income, but many items qualify as income and yet clearly are not wages. Interest, rent, and dividends are ready examples. And the very definition of "wages" in 3401 (a) itself goes on specifically to exclude certain types of remuneration for an employee's services to his employer (e. g., combat pay, agricultural labor, certain domestic service). Our task, therefore, is to determine the character of the lunch reimbursements in the light of the definition of "wages" in 3401 (a), and the Company's consequent obligation to withhold under 3402 (a).

So whether amounts paid are or are not "wages" has very little to do with whether the amounts paid are "compensation for services" that are included in taxable income.

2. His other major misrepresentation is the claim that Congress can tax income on if there is a "federal privilege." As I've explained in another message in this thread, no case in the history of the United States has ever said such a thing, and several Supreme Court decisions have unambiguously rejected the proposition.

[Dr. Caligari]

and all excises are on a priviledge. True or false?

That part of it is false. Privilege taxes are all excise taxes, but not all excise taxes are privilege taxes. (All dogs are mammals, but not all mammals are dogs.) One Supreme Court case said that the category of excise taxes also includes taxes on "a transaction or event." Receiving money for working in the private sector is a "transaction or event."

In the case of Steward Machine Co. v. Davis (1937), the Supreme Court said:

We are told that the relation of employment is one so essential to the pursuit of happiness that it may not be burdened with a tax. Appeal is made to history. From the precedents of colonial days we are supplied with illustrations of excises common in the colonies. They are said to have been bound up with the enjoyment of particular commodities. Appeal is also made to principle or the analysis of concepts. An excise, we are told, imports a tax upon a privilege; employment, it is said, is a right, not a privilege, from which it follows that employment is not subject to an excise. Neither the one appeal nor the other leads to the desired goal.

.....

The historical prop failing, the prop or fancied prop of principle remains. We learn that employment for lawful gain is a "natural" or "inherent" or "inalienable" right, and not a "privilege" at all. But natural rights, so called, are as much subject to taxation as rights of less importance. An excise is not limited to vocations or activities that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right.

[webhick]

and all excises are on a priviledge. True or false?

That part of it is false. Privilege taxes are all excise taxes, but not all excise taxes are privilege taxes. (All dogs are mammals, but not all mammals are dogs.)

I've always preferred this one (and once used it as an example of a false proof in geometry), but I can't remember which comedian said it:

All huskies have two different colored eyes.
David Bowie has two different colored eyes.
David Bowie is a husky.

[LPC]

I've always preferred this one (and once used it as an example of a false proof in geometry), but I can't remember which comedian said it:

All huskies have two different colored eyes.
David Bowie has two different colored eyes.
David Bowie is a husky.

Woody Allen said that:

All men are mortal;
Socrates was mortal;
Therefore, all men are Socrates.

[Doktor Avalanche]

do you really beleive that if you loose in court youre wrong? Especially in a tax case?

Yeah, that's exactly what we believe - especially in a tax case.

Sorry, but we have some pretty funny ideas about "winning" here at Quatloos. "Winning" to us means that you got off scott free (found not guilty), not sanctioned in civil court and didn't have to pay any back taxes with penalties and interest.

Now if Pete (or any other tax protestor out there) can manage that hat trick, we'll gladly concede that Pete (or any other tax protestor out there) is correct. Hell, some of us would go one step further and actually start using their methods to get out of paying taxes.

But it ain't gonna happen. There's a reason why tax protestors (Pete included) always bat zero, mutter.

There's a reason why Pete's going to be convicted.

Part of Pete's problem is that he thinks he's the first person in America to come up with this idea. He's not, not by a long shot.

Now, mutter, I read somewhere that you're boning up to be a paralegal. First of all, let me congratulate you on your excellent choice. As someone who graduated with a degree in paralegal sciences I can tell you that being a paralegal is challenging, rewarding and pretty damn exciting (although not as sexy as being an attorney).

So I'm going to impart the secret on how to effectively read and cite court cases. Here it is:

You don't have to look any further than the Holding of the case to see how the court ruled.

Of course, you're welcome to read on (because it's interesting to see how the judge(s) arrived at that conclusion) but the Holding section of the case (right at the top of the page) tells you everything you need to know.

[LPC]

do you really beleive that if you loose in court youre wrong? Especially in a tax case?

If you lose consistently on a legal issue then yes, you're wrong.

Hendrickson, and people making arguments similar to Hendricksons, have lost 100% of the time, so yes, they're wrong.

[Imalawman]

do you really beleive that if you loose in court youre wrong? Especially in a tax case?

If you lose consistently on a legal issue then yes, you're wrong.

Hendrickson, and people making arguments similar to Hendricksons, have lost 100% of the time, so yes, they're wrong.

Again, its a misunderstand between the legal world and the moral world. Legally, yes, its definitely means you're 100% wrong. Morally, you can be "right" even if the courts disagree with you. That doesn't change the fact that legally you're wrong. With taxes, I fail to see the moral implications of finding out that you mis-interpreted a code section.

For instance - OJ Simpson was legally tried and found to be legally innocent. He is then, 100% legally innocent of those murders. Now, I happen to personally think that morally, even factually, he is guilty of those crimes. But under the law, he is innocent.

So when we say, when a court rules against you, you'd be wrong, we mean it. When you're disputing a legal term, a code section, then when you're found legally wrong - you're wrong. End of story. If you're argue that you have the right to a particular thing and the court disagrees with you, you could be morally right, but legally wrong.

[Famspear]

Mutter, another point to consider is the one alluded to by Doktor Avalanche: Merely being acquitted in a criminal tax case is not a "win" for the tax protester argument. Tommy Cryer was acquitted in a criminal tax case, as was Vernice Kuglin and a few others. However, all these people still owe the taxes. All these people are still subject to forced collection action by the IRS -- and the IRS does not even have to go to court to seize assets (once certain procedural steps are followed.)

The acquittal in a federal criminal tax case does not change the legal status of your tax liability, and a jury verdict of not guilty in a criminal tax case is not a ruling on the interpretation of the tax law, or on the validity of the tax protester's argument. In the United States, juries render only verdicts -- findings of fact. Rulings (official decisions about what the law is) can be made only by a judge.

A jury verdict in the O.J. Simpson criminal case that Simpson is not guilty is not a ruling by the court that there is no law against murder, or that the law about murder would be what O.J. Simpson claims the law is.

That means that if Peter Hendrickson were to be acquitted in his upcoming trial, the acquittal would not be a ruling by the court that Peter Hendrickson is "correct" on his interpretation of the law.

A further point: On rare occasions, juries engage in something called jury nullification. This is a legal concept that is often misunderstood by tax protesters, partly because of the confusing terminology used to describe what happens in a jury nullification. Jury nullification can occur where, for example, a jury simply takes it upon itself to reject the law as described to the jury by the judge, and to reach a verdict contrary to the law. The key point is that even when this happens, the jury verdict is not a ruling on the law -- even if the jury intends it to be so. Under our legal system, a jury can only render a verdict -- a finding of fact. In a criminal case, that means Guilty or Not Guilty.

Conclusions of law, or rulings -- those things that have what we call legally binding precedential effect, or stare decisis effect as statements of what the law is -- can be made only by the judge.

So, Hendrickson's great non-delusional hope, if he has one, is that by the end of the trial the jury will find that the government will not have proved its case beyond a reasonable doubt as to at least one element of each offense with which he is charged. Hendrickson has an uphill battle, but it is not hopeless for him (in my opinion). My best guess is that he will probably be convicted, but he does have a chance. Tommy Cryer received an acquittal, and maybe Pete can too.

Even if he is acquitted, Pete will still face the reality that he is bound by the income tax laws as the Internal Revenue Service interprets them, not as he interprets them -- not because the IRS "says so," but rather because the IRS happens to be legally correct. Also, he will still face the reality that he is under a court order not to use his Cracking the Code scam on his own personal tax returns, and he will still face the reality that if he uses his scam again, he can be charged again. (Each tax year is a separate offense, so acquittal for year A would not prevent him from being charged and convicted for an offense for year B.)

Mutter, I know this is not what you and the losthorizon regulars want to hear, but that's it.

[LPC]

Even if he is acquitted, Pete will still face the reality that he is bound by the income tax laws as the Internal Revenue Service interprets them, not as he interprets them -- not because the IRS "says so," but rather because the IRS happens to be legally correct.

Challenging the IRS interpretation of the law is not necessarily a crime. I and other lawyers do it all the time, but we do it correctly, by confronting the issue directly, and not by filing documents intended to mislead the IRS.

The crime that Hendrickson is accused of is not that he disagreed with the IRS, but that he willfullly disregarded the law as stated by Congress and interpreted by the courts, and that he filed returns that he knew falsely represented the facts and the law.

[mutter]

I just posted this at LH. dont get excited Iam still doing my re-evaluation. My moma taught me to be man enough to admit when i am wrong. i still hate having to do it, especially when its cos I didnt do my due diligence. But after about 50 pages and the total collapse of the case cites i would have used as evidence. I ve no choice but to admit I was wrong to call Dan's work out as invalid.
ive not made up my mind about the Gov shill part thou

"After gaining some legal education myself I now beleive i am wrong about
Dans FAQ. I believe they should be read by us and understood by us.
I apologize to Dan. i was legally ignorant and did not read these rebuttals with an open mind. "

[mutter]

do you really beleive that if you loose in court youre wrong? Especially in a tax case?

Yeah, that's exactly what we believe - especially in a tax case.

Sorry, but we have some pretty funny ideas about "winning" here at Quatloos. "Winning" to us means that you got off scott free (found not guilty), not sanctioned in civil court and didn't have to pay any back taxes with penalties and interest.

Now if Pete (or any other tax protestor out there) can manage that hat trick, we'll gladly concede that Pete (or any other tax protestor out there) is correct. Hell, some of us would go one step further and actually start using their methods to get out of paying taxes.

But it ain't gonna happen. There's a reason why tax protestors (Pete included) always bat zero, mutter.

There's a reason why Pete's going to be convicted.

Part of Pete's problem is that he thinks he's the first person in America to come up with this idea. He's not, not by a long shot.

Now, mutter, I read somewhere that you're boning up to be a paralegal. First of all, let me congratulate you on your excellent choice. As someone who graduated with a degree in paralegal sciences I can tell you that being a paralegal is challenging, rewarding and pretty damn exciting (although not as sexy as being an attorney).

So I'm going to impart the secret on how to effectively read and cite court cases. Here it is:

You don't have to look any further than the Holding of the case to see how the court ruled.

Of course, you're welcome to read on (because it's interesting to see how the judge(s) arrived at that conclusion) but the Holding section of the case (right at the top of the page) tells you everything you need to know.

thanks. i doing the online BCI course just so I could understand these arguements. so far I ve found that with just a little education alot of the stuff falls away as utter non sense. legally speaking.
ive noted that when anyone asks Cryer or one of his if he paid the tax there is either silence or an attack. I received an attack when I asked.
PS It will be as sexy IF I decide to work as one. Which type makes the most? I heard it was in personal injury, but since I am doing so much in the tax area I might go there

[mutter]

Mutter, another point to consider is the one alluded to by Doktor Avalanche: Merely being acquitted in a criminal tax case is not a "win" for the tax protester argument. Tommy Cryer was acquitted in a criminal tax case, as was Vernice Kuglin and a few others. However, all these people still owe the taxes. All these people are still subject to forced collection action by the IRS -- and the IRS does not even have to go to court to seize assets (once certain procedural steps are followed.)

The acquittal in a federal criminal tax case does not change the legal status of your tax liability, and a jury verdict of not guilty in a criminal tax case is not a ruling on the interpretation of the tax law, or on the validity of the tax protester's argument. In the United States, juries render only verdicts -- findings of fact. Rulings (official decisions about what the law is) can be made only by a judge.

A jury verdict in the O.J. Simpson criminal case that Simpson is not guilty is not a ruling by the court that there is no law against murder, or that the law about murder would be what O.J. Simpson claims the law is.

That means that if Peter Hendrickson were to be acquitted in his upcoming trial, the acquittal would not be a ruling by the court that Peter Hendrickson is "correct" on his interpretation of the law.

A further point: On rare occasions, juries engage in something called jury nullification. This is a legal concept that is often misunderstood by tax protesters, partly because of the confusing terminology used to describe what happens in a jury nullification. Jury nullification can occur where, for example, a jury simply takes it upon itself to reject the law as described to the jury by the judge, and to reach a verdict contrary to the law. The key point is that even when this happens, the jury verdict is not a ruling on the law -- even if the jury intends it to be so. Under our legal system, a jury can only render a verdict -- a finding of fact. In a criminal case, that means Guilty or Not Guilty.

Conclusions of law, or rulings -- those things that have what we call legally binding precedential effect, or stare decisis effect as statements of what the law is -- can be made only by the judge.

So, Hendrickson's great non-delusional hope, if he has one, is that by the end of the trial the jury will find that the government will not have proved its case beyond a reasonable doubt as to at least one element of each offense with which he is charged. Hendrickson has an uphill battle, but it is not hopeless for him (in my opinion). My best guess is that he will probably be convicted, but he does have a chance. Tommy Cryer received an acquittal, and maybe Pete can too.

Even if he is acquitted, Pete will still face the reality that he is bound by the income tax laws as the Internal Revenue Service interprets them, not as he interprets them -- not because the IRS "says so," but rather because the IRS happens to be legally correct. Also, he will still face the reality that he is under a court order not to use his Cracking the Code scam on his own personal tax returns, and he will still face the reality that if he uses his scam again, he can be charged again. (Each tax year is a separate offense, so acquittal for year A would not prevent him from being charged and convicted for an offense for year B.)

Mutter, I know this is not what you and the losthorizon regulars want to hear, but that's it.

I understand
facts are facts and someone not liking the fact doesnt change it.

[mutter]

Even if he is acquitted, Pete will still face the reality that he is bound by the income tax laws as the Internal Revenue Service interprets them, not as he interprets them -- not because the IRS "says so," but rather because the IRS happens to be legally correct.

Challenging the IRS interpretation of the law is not necessarily a crime. I and other lawyers do it all the time, but we do it correctly, by confronting the issue directly, and not by filing documents intended to mislead the IRS.

The crime that Hendrickson is accused of is not that he disagreed with the IRS, but that he willfullly disregarded the law as stated by Congress and interpreted by the courts, and that he filed returns that he knew falsely represented the facts and the law.

yes but I believed certain things for years too. Just cos a court says no its this way doesnt always mean one changes ones mind. Then again most people are NOT open minded either. Once upon a time I would read a case cite and believe it meant what the person citing it wanted it to mean.
I also think PH has a good point that a court cant order you to testify(tax form) in any specific manner. but thats not what the injuction orders does it? It prohibits a specific action. IE its not ordering an action to be performed its ordering that a specific action NOT be performed on specific forms. correct?

[ASITStands]

Congratulations, 'mutter!'

Your eyes are beginning to open. Just keep reading law, and you'll see it.

Welcome to Quatloos! And, thanks for being honest enough to change your mind.