Mutter's analysis

[Famspear]

On this same subject, user "strawman" at losthorizons wrote:

In all these cases where the judgement deams the Petitioner's argument "frivolous" I have yet to see the specifics of why? What facts are provided that determine the arguments "frivolous"?

http://www.losthorizons.com/phpBB/viewt ... 3036#13036

Now, don't get me wrong. Asking for the specifics of "WHY" is a fair question. Strawman is right to ask the question, and he should ask the question. Here at Quatloos, we try to provide the explanations to those losthorizons regulars who come here and discuss the issues. As Peter Hendrickson has essentially stated, he is not interested in seeing anything on his losthorizons web site that contradicts his own theories. He has made that plain.

What I am saying is that the mere fact that the Court in a particular case does not explain itself to Pete's satisfaction, or to my satisfaction, or to Strawman's satisfaction, etc., does not change the validity of that Court decision.

Personally, I would love to see a full explanation by the Court every time a CtC case is decided. It would make it a lot easier for followers of Hendrickson to see the scam.

But let's put things in perspective, and let's be realistic:

"Frivolous. Unworthy of serious attention; trivial [ . . .] inappropriately silly". American Heritage Dictionary, p. 535, Houghton Mifflin Co. (2d Coll. Ed. 1985).

"Frivolous. of little value or importance; trifling; trivial [ . . . ] not properly serious or sensible; silly and light-minded; giddy". Webster’s New World Dictionary of the American Language, p. 560, World Publishing Co. (2d Coll. Ed. 1978).

"Frivolous. of little weight or importance [ . . . ] lacking in seriousness [ . . . ] irresponsibly self-indulgent". Webster’s New Collegiate Dictionary, p. 461, G. & C. Merriam Co. (8th Ed. 1976).

From Kahn v. United States:

Section 6702 does not define the terms "position" or “frivolous,” but whatever else is meant by the term “frivolous,” it is reasonable to conclude that a claim is frivolous when there is no argument on either the law or the facts to support it.

--Kahn v. United States, 753 F.2d 1208, 85-1 U.S. Tax Cas. (CCH) paragr. 9152 (3d Cir. 1985).

From Coleman v. Commissioner:

A petition to the Tax Court, or a tax return, is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law. This is the standard applied under Fed. R. Civ. P. 11 for sanctions in civil litigation, and it is a standard we have used for the award of fees under 28 U.S.C. §1927 and the award of damages under Fed. R. App. P. 38.

--Coleman v. Commissioner, 791 F.2d 68, 86-1 U.S. Tax Cas. (CCH) paragr. 9401 (7th Cir. 1986).

[ASITStands]

I'd like to point out two things:

From Coleman v. Commissioner:

A petition to the Tax Court, or a tax return, is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law. This is the standard applied under Fed. R. Civ. P. 11 for sanctions in civil litigation, and it is a standard we have used for the award of fees under 28 U.S.C. §1927 and the award of damages under Fed. R. App. P. 38.

--Coleman v. Commissioner, 791 F.2d 68, 86-1 U.S. Tax Cas. (CCH) paragr. 9401 (7th Cir. 1986).

See the emboldened words.

An argument is frivolous if it is contrary to established law [i.e., case law] and/or unsupported by a reasoned, colorable argument for a change in law, or a change in policy.

Most in the tax movement fail to make a reasoned, colorable argument for change.

Secondly, Patrick Mooney is an Owl while his detractor, Weston White remains NOT an Owl.

EDIT: The discussion has bee good. I hope 'mutter' and 'MN Stix' benefit.

[Demosthenes]

"Frivolous" is polite judge-speak for really really stupid.

[Famspear]

I think I read this somewhere.....

. . . . you will read many decisions of judges who refer to the views of tax protesters as “frivolous,” “ridiculous,” “absurd,” “preposterous,” or “gibberish.” If you don’t read a lot of judicial opinions, you may not understand the full weight of what it means when a judge calls an argument “frivolous” or “ridiculous.” Perhaps an analogy will help explain the attitude of judges.

Imagine a group of professional scientists who have met to discuss important issues of physics and chemistry, and then someone comes into their meeting and challenges them to prove that the earth revolves around the sun. At first, they might be unable to believe that the challenger is serious. Eventually, they might be polite enough to explain the observations and calculations which lead inevitably to the conclusion that the earth does indeed revolve around the sun. Suppose the challenger is not convinced, but insists that there is actually no evidence that the earth revolves around the sun, and that all of the calculations of the scientists are deliberately misleading. At that point, they will be jaw-droppingly astounded, and will no longer be polite, but will evict the challenger/lunatic from their meeting because he is wasting their time.

That is the way judges view tax protesters. At first, they try to be civil and treat the claims as seriously as they can. However, after dismissing case after case with the same insane claims, sometimes by the same litigant, judges start pulling out the dictionary to see how many synonyms they can find for “absurd.”

Oh, wait, now I remember: Daniel B. Evans, The Tax Protester FAQ, at

http://evans-legal.com/dan/tpfaq.html

[Famspear]

Losthorizons regular "databrain" or "tim" writes:

Mutter,

Based on CtC info, there are some basic principles at work - which you are very familiar with. 16th, "Trade or Business", etc., etc.

Given your new paralegal education, it would seem you could enlighten us as to the basic principles and what is correct and/or incorrect with legal facts - not opinions.

You stated that you feel recent court cases have shaken your understandings of the basic CtC principles and/or even reversed them. However, you did not offer anything of substance as to how or why the facts have changed.

Yes, the courts may continue to decide cases on many different things - but can they actually change the facts? Can they change the 16th? Can they change the "terms" as defined by Congress? Can they simply ignore the Constitution? I pray that they cannot, else America is lost.

Thus, I ask you to help us understand your new position using the "legal" basis for your determination that this is a no-win situation.

Regards,

Tim

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

Tim, like Mutter and MN Stix, is questioning things, looking for answers.

[The Observer]

I believe Mutter is correct. This is another problem I have seen over and over at losthorizons. When a Court decision contradicting Hendrickson's scheme is presented, some users will go off on tangents. This "behavior" may be learned from Hendrickson, who tries to divert attention from the losses by arguing such things as (1) that the individual didn't present CtC properly on his tax return, or (2) that the Court, in its decision, didn't explain itself well enough, or (3) that the Court somehow evaded some legal point that Hendrickson insists the Court should have covered.

Regarding item (3) above, this is where the train leaves the rails in terms of LHer's failing to see the logical implications of Pete's excuses. If the courts are truly "evading" what they should be including in their rulings, then it must mean that Pete's theories could never prevail in a court of law and that it would be a waste of time and money to defend your belief in the CtC system. I realize that this is just sliding into the baseless "the courts are all corrupt" argument, but the result is still the same - you aren't going to win. So why continue with a game plan that is going to result in failure?

If you knew that that the first 5000 models of a particular car that rolled off the assembly line were defective, would you still buy model 5001?

If you saw the first 10 guys who jumped off a cliff with the latest thing in lighter-than-air body gear powered by a perpetual-motion engine fell to horrible deaths, would you volunteer to be the next test pilot?

If the Centers For Disease Control released a study showing that your favorite brand of cheese from Wisconsin was responsible for the last 15 outbreaks of listeriosis, would you continue to indulge?

If you knew that your local politician was involved with organized crime and was indirectly responsible for the deaths of those 8 people who ran against him at election time, would you seek to run against him in the next election?

[Famspear]

Losthorizons regular "databrain" or "tim" writes:

. . . .Yes, the courts may continue to decide cases on many different things - but can they actually change the facts? Can they change the 16th? Can they change the "terms" as defined by Congress? Can they simply ignore the Constitution? I pray that they cannot, else America is lost. . . . .

This highlights part of the problem. Tim seems to be dismissive of the courts, as if "the law" were something that exists in the pages of Cracking the Code, and not in the rulings of actual courts of law. It's as though Tim looks at court decisions as being almost incidental or insignificant to the process of determining what the law is. It is as though Tim looks at tax law the way he might look at computer technology and the laws of physics -- as some immutable set of laws that exist independently of the people who try to use those laws. Tim may be struggling with the misconception that the validity of a precept of law is somehow dependent on how logical that precept seems to be to Tim. And since Tim finds Peter Hendrickson's precepts about tax law to flow with a certain "logic" that is intellectually pleasing and "logical" to Tim's scientifically-oriented mind, Tim falls into fundamental error.

Again, at least one legal scholar has pointed out this problem in the context of some engineers who enter law school. Some engineers who have been trained for years in a "hard science" field have a hard time coming to grips with the concept of how laws (i.e., secular laws, the rules enforced in society by those things we call "governments") are created, and especially, how a legal system based on English common law (primarily judge-made law) actually works. Before you can understand the higher stuff, you must understand the basics. Just as not everyone is psychologically suited to be a computer engineer, not everyone is suited to be a lawyer or an accountant.

Tim is searching, but perhaps he does not have some of the basics down pat yet, because he might be trying to approach law the way he approaches computer technology. I don't know.

[mutter]

Losthorizons regular "databrain" or "tim" writes:

. . . .Yes, the courts may continue to decide cases on many different things - but can they actually change the facts? Can they change the 16th? Can they change the "terms" as defined by Congress? Can they simply ignore the Constitution? I pray that they cannot, else America is lost. . . . .

This highlights part of the problem. Tim seems to be dismissive of the courts, as if "the law" were something that exists in the pages of Cracking the Code, and not in the rulings of actual courts of law. It's as though Tim looks at court decisions as being almost incidental or insignificant to the process of determining what the law is. It is as though Tim looks at tax law the way he might look at computer technology and the laws of physics -- as some immutable set of laws that exist independently of the people who try to use those laws. Tim may be struggling with the misconception that the validity of a precept of law is somehow dependent on how logical that precept seems to be to Tim. And since Tim finds Peter Hendrickson's precepts about tax law to flow with a certain "logic" that is intellectually pleasing and "logical" to Tim's scientifically-oriented mind, Tim falls into fundamental error.

Again, at least one legal scholar has pointed out this problem in the context of some engineers who enter law school. Some engineers who have been trained for years in a "hard science" field have a hard time coming to grips with the concept of how laws (i.e., secular laws, the rules enforced in society by those things we call "governments") are created, and especially, how a legal system based on English common law (primarily judge-made law) actually works. Before you can understand the higher stuff, you must understand the basics. Just as not everyone is psychologically suited to be a computer engineer, not everyone is suited to be a lawyer or an accountant.

Tim is searching, but perhaps he does not have some of the basics down pat yet, because he might be trying to approach law the way he approaches computer technology. I don't know.

Exactly my point. I thought hurump I am a network engineer I understand whats going on in a network at a quantum level I can easily analyse the law no problem. Now I know I was wrong. There are nuances to the law one must learn to be able to do a proper analyzation.

[Famspear]

Exactly my point. I thought hurump I am a network engineer I understand whats going on in a network at a quantum level I can easily analyse the law no problem. Now I know I was wrong. There are nuances to the law one must learn to be able to do a proper analyzation.

Which illustrates another point I want to make..... There are also plenty of science-oriented people who can understand legal concepts, etc. I am sure that while some engineers have special problems in law school, there are other engineers who do not have those problems.

I became a CPA long before I went to law school. I found the accounting training and especially the practice of public accounting (at least for me) to be excellent training for law school. I was primarily an auditor, though I had lots of tax experience as well.

Contrary to what some non-accountants might think, accounting is not primarily "arithmetic." It's not primarily "mathematics." The theory side of it is very much intangible concepts. And they're man-made (woman-made?), sometimes changing concepts, not immutable rules.

Accounting is also a very rigorous discipline, because it requires you to develop an extended ability to deal with both the details and the big picture. This is very hard for many people (it was for me). Many people are good at details but not the big picture. And many others are good at the big picture, but weak on details. As a public accounting practitioner, real success depends in part on the ability to develop both kinds of skills.

The other thing about the practice of accounting which, I suspect, separates it from other business fields such as finance, marketing, and management, is that accounting (especially if you go into auditing) involves so much more cross-disciplinary expertise. The public perception of accountants as "bean counters" or "number crunchers" is very misleading when you start looking at auditors in a medium or large firm. The very process of auditing involves study and evaluation of the environment (including the legal, business, economic and other aspects) in which the audited company operates. Mere bean counters won't make it in this world.

However, when I first entered the accounting field, I had a hard time. I came from a "creative" background, and I had never been used to really concentrating for such long periods of time. I was physically exhausted at the end of an 8 hour day. I used to go straight home and crash for a couple of hours, then go out and eat in a restaurant about 7 or 8 pm (I was single at the time, no worry about a family, etc.). It's hard to describe, but accounting, especially financial accounting and auditing, really involves mental processes that deal with algorithms, a long series of complex mental steps. There is something about accounting that engenders error. It is almost impossible not to make errors when you first begin, and much of the accounting and auditing process involves what some call "prevent controls" and "detect controls" -- plans, records and procedures that are designed to (A) prevent errors from occurring, and (B) detect and correct the errors that do occur.

Accounting, then, at high levels is very technical - it involves technique and process that may be foreign to everyday thinking. I found it to be an excellent background to have when I entered law school -- which of course was an adventure about which books are written.

Someone else may have a different view of accounting - or law. That's my two cents.

[ASITStands]

I think it would be of value to both readers of Lost Horizons and 'mutter' if 'mutter' were to compose and post a discussion of what changed his mind in the thread at Lost Horizons.

But take your time!

Compose it when you have time to actually copy specific citations from case law, and show how you were led to believe one thing when the case actually said something different.

Then when your discovery is fully explained, post it to the thread where Tim asks questions.

It's my experience that once tax protesters read an "actual" case in full, they understand that the small portion they've been citing does not say what they think. It's an eye-opener.

And, don't be side-tracked by trying to answer everyone's argument.

That way, you exorcise whatever 'TP Demons' troubled you in the past and perhaps change a few minds. Just remember: It may be your last post, as Hendrickson may take notice.

And, on a different subject, sometime back there was a poll as to when Quatloos regulars thought the forum would "go dark." I think that time is shortly to appear.

Hendrickson is obviously preoccupied with his criminal trial but once Lost Horizons regulars complain about your reservations, and questions are raised, I suspect it will disappear.

[mutter]

"I think we can see why I call this a weak, half assed argument. Again, the confusion is found in what the Pollock case is dealing with. As we see from the obvious words written, SCOTUS is dealing with real property, personally owned, RENT. The end result is tax on rent. This is still an avoidable tax. One may avoid the tax by not renting their personal property. Behold the difficult decision SCOTUS had to make in this case Tax on rent is an indirect tax, fully avoidable."
if you think paying taxes on rent is avoidable i suggest you ask that congressman who got busted not paying his.
I ll let someone else go thru the other stuff for you. i ve got to go replace some hard drives

[Famspear]

Dear MN Stix:

I don't have time to address your post now. I'll just point out a couple of the flaws.

You cite Coppage and Butchers' Union. These are cases cited over and over and over and over and over and over and over and over by tax protesters/tax deniers.

This is fundamental error.

''Coppage v. Kansas'', 236 U.S. 1 (1915), was a criminal case involving a defendant convicted, under a Kansas statute, of firing an employee for refusing to resign as a member of a labor union. No issues of taxation were presented to or decided by the Court. If you try to cite Coppage in a court of law for the propositions in Cracking the Code, you will be lucky if you are only laughed out of court.

Butchers' Union Co. v. Crescent City Co.'', 111 U.S. 746 (1883) was a case involving interpretation of the Louisiana constitution and certain ordinances of the city of New Orleans. Some protesters have stated that the Supreme Court in this case defined labor as "property, and the most sacred kind of property". That is false. In a concurring opinion, Justice Field quoted approvingly from Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'' (1776), as follows:

that 'the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property.

However, the Adam Smith quote was not a ruling by the Court itself. Instead, the Court ruled that the Louisiana constitution and the New Orleans ordinances did not impermissibly impair a pre-existing obligation under a contract when those laws effectively ended a slaughter-house monopoly by the Crescent City Company.

More directly to the point: Butchers' Union Co. v. Crescent City Co. is not a tax case. No issues regarding the power to tax incomes from businesses, vocations, or labor were presented to -- or decided by -- the Court. The word "tax" does not even appear in the text of the court's decision.

Citing cases like these to support Cracking the Code is fundamental error.

This is an example of what legal commentator Daniel B. Evans has called "chaining" - the error of stringing quotations from different texts together and then arguing that the cases stand for something that was not a ruling in the cases. This kind of error would bring public humiliation to you in a first year law school class.

More to come later......

[Nikki]

MN

Before this thread gets locked at the 100 post limit, I'd like to offer three things for your consideration.

First, there is no tax on labor. The tax at issue is on INCOME. Although it doesn't matter if it's a direct or indirect tax, the tax on wages, salaries, or other compensation for personal service IS avoidable. Many people avoid it by not working. There are retired people, people who subsist on the income from stocks, bonds, rental properties, business profits, and so on. They have all avoided the tax on income derived from labor.

Second, as to privilege, could you please explain the privilege associated with embezzeling, prostitution, or drug smuggling? While you are working on that, remember that the income from all those illegal pursuits is, in fact, taxable.

Finally, ponder this. If Pete's theory is correct, why isn't anyone who really matters using it? Bill Gates used to draw a significant salary from Microsoft. Wouldn't he have a big incentive to reduce his taxes? Why didn't the dozens of tax professionals working for him have him use Pete's approach. And why did it take so long for anyone, other than Pete, to come up with this theory? The income tax has been around for almost 100 years. Don't you think that all the accountants and lawyers involved with saving their clients' money in taxes would have uncovered this fatal flaw in the tax system years before Pete did? Think about it.

[mutter]

I think it would be of value to both readers of Lost Horizons and 'mutter' if 'mutter' were to compose and post a discussion of what changed his mind in the thread at Lost Horizons.

But take your time!

Compose it when you have time to actually copy specific citations from case law, and show how you were led to believe one thing when the case actually said something different.

Then when your discovery is fully explained, post it to the thread where Tim asks questions.

It's my experience that once tax protesters read an "actual" case in full, they understand that the small portion they've been citing does not say what they think. It's an eye-opener.

And, don't be side-tracked by trying to answer everyone's argument.

That way, you exorcise whatever 'TP Demons' troubled you in the past and perhaps change a few minds. Just remember: It may be your last post, as Hendrickson may take notice.

And, on a different subject, sometime back there was a poll as to when Quatloos regulars thought the forum would "go dark." I think that time is shortly to appear.

Hendrickson is obviously preoccupied with his criminal trial but once Lost Horizons regulars complain about your reservations, and questions are raised, I suspect it will disappear.

all the case cites I was going to use to prove I didnt get paid income were shown to be either inapplicable or not even a freakin cite from the court but from the defendants brief! thats why I changed my mind.
heres a good example of what you state above about reading the case. the bankers association case. the one that some say means no law is enforceable without a regulation. when you read the blurb i mean cite that says that you go you have to have a reg to enforce it on me. then I read the case and found out it was about a tax law that congress said the Sec SHALL right regs for cos it had something to do with how banks where supposed to do a specific thing. the IRS tried to penalise the banks for doing it their way. NO Regs where ever written to tell the bankers how they were to do this thing. so the court chastised the IRS for trying to fine the banks when the Sec never wrote the regs telling the banks how to do it. thus all laws do NOT need a regulation to be enforceable only the ones that say SHALL make regs do.
A complete misconception was propergated through out the TP community based upon some very bad research.
Now wouldnt any judge say that arguemnt(all laws needs regs) is frivilous? Of course they would

[Dr. Caligari]

Again, I’m here with an open mind. The feeling must be mutual on your part, or we will never gain ground. Please support your opinions with law that directly relates to that opinion. If you cannot provide the laws or rulings by SCOTUS, I have no choice but to ignore your opinion as it is not backed by law. I’m here to listen as I said, unsupported information is useless to me. Actually, it is useless information to anyone.

Thank you for coming here. I used to post at Lost Horizons, until Pete banned all non-CTC opinions. I hope you wil consider the following two SCOTUS cases. (I have given you links to the full opinions so you can review them without taking my word for what they say).

1. An "excise' does not have to be avoidable. The Supreme Court upheld the constitutionality of the inheritance tax, as an excise, in
Knowlton v. Moore (1900). http://caselaw.lp.findlaw.com/scripts/g ... 8&invol=41 Do you think the act of dying is avoidable?

2. An excise doesn't have to involve any "privilege." The Supreme Court explicitly held as follows in Steward machine Co. v. Davis (1937) http://caselaw.lp.findlaw.com/cgi-bin/g ... &invol=548:

First: The tax, which is described in the statute as an excise, is laid with uniformity throughout the United States as a duty, an impost, or an excise upon the relation of employment.

1. 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 [301 U.S. 548, 579] 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.

As to the argument from history: Doubtless there were many excises in colonial days and later that were associated, more or less intimately, with the enjoyment or the use of property. This would not prove, even if no others were then known, that the forms then accepted were not subject to enlargement. Cf. Pensacola Teleg. Co. v. Western Union Telegraph Co., 96 U.S. 1 , 9; In re Debs, 158 U.S. 564, 591 , 15 S.Ct. 900; South Carolina v. United States, 199 U.S. 437, 448 , 449 S., 26 S.Ct. 110, 4 Ann.Cas. 737. But in truth other excises were known, and known since early times. Thus in 1695 (6 & 7 Wm. III, c. 6), Parliament passed an act which granted 'to His Majesty certain Rates and Duties upon Marriages, Births and Burials,' all for the purpose of 'carrying on the War against France with Vigour.' See Opinion of the Justices, 196 Mass. 603, 609, 85 N.E. 545, 547.

*****
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.

[Imalawman]

Mutter, glad to have you here, but damn son, use a spell checker or something.

MN Stix - try being more simple. Find me a court case that says that you can't tax income derived from labor. Just one and I'll admit that I have wasted years of education and admit that I should have listened to Pete Hendrickson a long time ago. You won't find a single citation to support that and in fact you'll find case after case after case that says that the US gov't can tax income derived from labor.

Doesn't it bother you that you can't find a single court case to support your theory? Doesn't it bother you that not one respected lawyer or accountant agrees with you? Doesn't it bother you that not one scholarly paper has ever been written in support of your theory? Lastly, you do you really think Pete H. is smarter than anyone else that has ever studied the tax code?

Its funny because I've actually talked to and know people that wrote and drafted the current tax code and regulations and we have a good laugh about people that think you don't have to pay tax on income from labor. THERE IS NO CONSPIRACY.

[Duke2Earl]

I will let those who have more patience than I do respond book and verse....but until then Mr. Stix... good luck with that. You will need it.