Discussion with MN Stix

[MN Stix]

Income tax is on profit, gains and privilege...can we agree so far?

No, I'm afraid I can't agree with your very first proposition, so there is no need to go further.

Income tax is on taxable income - gross income less deductions. That comes from no less a source than 26 USC 1: "There is hereby imposed on the taxable income ...". If you truly want to argue law as to whether income tax is only imposed on "profit, gains and privilege", then you need to cite authority for that proposition. I see none in your post.

I will quote you, this post should cover one of the LPC responses as well. I should not limit it to LPC as it would appear that others believe this nonsense as well.

My opinion is backed by numerous SCOTUS ruling or opinion. I do not define law or write it. Where is your authority to make or decide law? You have no law making authority, nor do you have the ability to decide what the law is(praise God).

Your statement of income not being “gain, profit and privilege” is based on your opinion and not the opinion of SCOTUS. It therefore, would be in direct conflict with the SCOTUS decisions. This is true until you say income tax is “taxable income = gross income less deductions”. You neglect the fact that “income tax” is above the very top of the pyramid. “Taxable income” is directly below “income tax”. Below income tax, is gross income less deductions and so forth, all the way down to “wages”.

Using this theory you present, I need not look any further than gross income less deductions to conclude that my labor is not taxable income. Simply put, there are no deductions for labor. Therefore, “taxable income” is not present. Your theory is flawed at step 2.

Since a labor is certainly taxed indirectly, you simply cannot use your theory to derive an income tax. As I said, it would be flawed at step 2 of the process of figuring the amount of income tax. The end result would be a direct tax on your labor. Meaning, there is no way to “shift the burden” onto someone else, resulting in a direct tax. Only a complete drooling dunce still believes that the income tax is a direct tax.

That said my friends, is where “privileged activity” enters the “income tax”. Taxing everyone on their labor would otherwise result in a direct tax. That is obviously not the case. The tax is therefore NOT on labor, it is on a privilege granted by government. You may piss and moan about this all you want. If you want to argue about it, take it up with SCOTUS, not me.

This is how the government crafted its way directly into the laborers back pocket. The one condition is that a government granted privilege must be present. Anyone bypassing that condition, results in a direct tax. Again, SCOTUS has determined that the income tax always has been an indirect tax. The 16th amendment did not change that fact. Again, if you want to argue about that, take it up in court, not me.

An extremely weak argument has been brought forward by LPC, “Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 558 (1895).” :

“The first question to be considered is whether a tax on the rents or income of real estate is a direct tax within the meaning of the constitution. Ordinarily, all taxes paid primarily by persons who can shift the burden upon some one else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes. Nevertheless, it may be admitted that, although this definition of direct taxes is prima facie correct, and to be applied in the consideration of the question before us, yet the constitution may bear a different meaning, and that such different meaning must be recognized.”

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.

LPC, you are still comparing apples to oranges. The very least you can do is present a more recent case like Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916), in which the brushaber was the holder of stock. Again, the case in wholly irrelevant to taxing labor. It is simply more recent than the Pollock case. In either case, they are wholly irrelevant.

You then say “The idea of treating income from labor differently from any other kind of income continues to be incomprehensibly absurd.” I’m sorry you do not understand the obvious difference found in labor vs. stocks and rent.

What would you propose next? “STANTON v. BALTIC MINING CO, 240 U.S. 103 (1916)”? This is another wholly irrelevant case. Maybe you would like to continue to sway argument by way of other irrelevant cases, go ahead. I will point out the flaws in those cases you put forth, if you don’t mind.

Another issue is that “privilege” has just been pulled out of thin air, or an ill conclusion drawn from a SCOTUS case. That is not the case, as you should be well aware of. It is well represented in the following cases:

Flint v. Stone Tracy Co., 220 U.S. 107 (1911)

“Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.”

The idea that “privilege” is not recognized by law, just failed. I will not bother presenting any more facts in this regard. I will however, delve into the issue of rights. Another poster (maybe it was LPC maybe not, I will not bother going back to look at this time), suggested that the fruits of ones labor is not spelled out in the declaration is a fool or a communist theory.

“… all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness…”

As you can plainly see, the fruit of my labor is clearly an unalienable right. The Bill of Rights do not spell out unalienable rights. The Bill of Rights should be view as privileges granted by congress, not the creator. Don’t hate on the messenger, take it up with the founders or SCOTUS. We find this spelled out below, in plain English language.

Butcher's Union Co. v. Crescent City Co., 111 U.S. 746 (1883)

“It has been well said 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’.”

And…

Coppage v. Kansas, 236 U.S. 1 (1915)

”Included in the right of personal liberty and the right of private property- partaking of the nature of each- is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property”

I think that should about cover shooting down any of your opinions thus far. Your opinions never really had merit to begin with, I just wanted to point it out with supporting documentation. Your ill conceived notions on how taxing wages works, is understandable. After all, the understanding has been hidden away by your buddies at the IRS and miscreants in congress for a long, long time.

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.

One more thing before I go, I want to let each of you know that none of this is meant as a personal attack. Everything I say or present here, is only intended to attack information...not people. If this post offends anyone, please try to understand that it was not intended as a personal attack.

[Famspear]

I've started this thread because.....

well, you know why.

Stay tuned...

Edit by wserra: I merged Stix' last post into this thread for easier reference.

EDIT by Famspear: Danke!

[RyanMcC]

We are endowed by our creator, the right to the fruits of our labor as protected by the constitution. NRA's do not have those rights protected and are taxable.

Unfortunately, the US Constitution does not contain the word "fruits" or even "labor".

In his defense, he may have confused the US Constitution with Article 1 of the North Carolina Constitution:

Section 1. The equality and rights of persons.

We hold it to be self-evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.

http://www.ncga.state.nc.us/Legislation ... icle1.html

Another poster (maybe it was LPC maybe not, I will not bother going back to look at this time), suggested that the fruits of ones labor is not spelled out in the declaration is a fool or a communist theory.

“… all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness…” [I don't see the word "fruits" or "labor" here.]

As you can plainly see, the fruit of my labor is clearly an unalienable right. The Bill of Rights do not spell out unalienable rights. The Bill of Rights should be view as privileges granted by congress, not the creator. Don’t hate on the messenger, take it up with the founders or SCOTUS. We find this spelled out below, in plain English language.

On LostHorizons you said: "We are endowed by our creator, the right to the fruits of our labor as protected by the constitution."

So I pointed out the constitution of the United States did not even contain the word "fruits" or even "labor".

You now cite the Declaration of Independence as the source for you having the right to the "fruits of your labor", unfortunately, no part of the Delaration that you cited mention the "fruits of your labor", and infact, neither "fruits" or "labor" appear anywhere in the Delcaration of Independence either.

I may very well be a fool, but you haven't shown how the "fruits of your labor" are protected or even mentioned by either the US Constitution or the Declaration of Independence

[mutter]

Spell checker? Vas ist das?

[Dr. Caligari]

Re-posted from the old thread:

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.

[Famspear]

MN Stix wrote:

My opinion is backed by numerous SCOTUS ruling or opinion. I do not define law or write it. Where is your authority to make or decide law? You have no law makingauthority, nor do you have the ability to decide what the law is(praise God).

Neither the United States Supreme Court nor any other federal court has ever ruled that for a federal income tax to be valid, it must involve the exercise of a privilege. Never. Not even once.

Your statement of income not being “gain, profit and privilege” is based on your opinion and not the opinion of SCOTUS. It therefore, would be in direct conflict with the SCOTUS decisions.

No. Wrong. And there’s a simple test. Go find a federal court case where someone argued that the federal income tax was required to be imposed on a privilege, and the court ruled in that person’s favor. There is no such Supreme Court case. There is no such federal court case at all. None. Not even one.

Since a labor is certainly taxed indirectly, you simply cannot use your theory to derive an income tax. As I said, it would be flawed at step 2 of the process of figuring the amount of income tax. The end result would be a direct tax on your labor. Meaning, there is no way to “shift the burden” onto someone else, resulting in a direct tax. Only a complete drooling dunce still believes that the income tax is a direct tax.

You're wrong, and you're also missing the point. First, there is nothing in the text of the Constitution or in any court ruling that a federal income tax on labor (or income from labor, or however we want to put it) must be a direct tax to be valid, or must be an indirect tax to be valid. Yes, the federal income tax on income in the form of compensation for personal services (whether called "wages" or "salary" or "labor" or "income from labor" or any other label) happens to be classified as an indirect tax. As an indirect tax that just happens to be geographically uniform, the federal income tax on compensation for personal services does not violate the Constitution. But even if it were a direct tax, it would not violate the Constitution.

The “shift the burden” argument is not the law. No federal court in history has ever ruled that the federal income tax classification as direct or indirect is somehow based on the “shift the burden” argument. And it doesn't matter anyway, because a federal income tax on compensation for personal services is constitutional, regardless of whether it's considered direct or indirect or "shifting the burden" or "not shifting the burden." There is a requirement that an indirect tax be geographically uniform. If you could find a court case where the court ruled that the Federal income tax imposed under the Internal Revenue Code of 1986, as amended, is not uniform and therefore unconstitutional, then that would be interesting -- but you cannot, for the simple reason that there is no such case. Sorry.

That said my friends, is where “privileged activity” enters the “income tax”. Taxing everyone on their labor would otherwise result in a direct tax.

Who cares? Look for a federal court case where the court ruled that taxing everyone on their labor was a direct tax, and that the tax was therefore invalid. There is no such court case.

The tax is therefore NOT on labor, it is on a privilege granted by government.

No, it’s not. And every time anyone has raised the argument that the federal income tax is a tax on a privilege granted by the government, that argument has been rejected. Every single time. No exceptions. I’ll be glad to provide a list of citations, if you like.

You may piss and moan about this all you want. If you want to argue about it, take it up with SCOTUS, not me.

No, we’re not the ones who are moaning, and we don’t need to take it up with SCOTUS, because neither SCOTUS nor any other federal court has ever ruled the way you claim. We're telling you what the courts have actually ruled. So, stop moaning and go look for a case where the court actually ruled that way. You will fail.

[The Operative]

Income tax is on profit, gains and privilege...can we agree so far?

No, I'm afraid I can't agree with your very first proposition, so there is no need to go further.

Income tax is on taxable income - gross income less deductions. That comes from no less a source than 26 USC 1: "There is hereby imposed on the taxable income ...". If you truly want to argue law as to whether income tax is only imposed on "profit, gains and privilege", then you need to cite authority for that proposition. I see none in your post.

I will quote you, this post should cover one of the LPC responses as well. I should not limit it to LPC as it would appear that others believe this nonsense as well.

My opinion is backed by numerous SCOTUS ruling or opinion. I do not define law or write it. Where is your authority to make or decide law? You have no law making authority, nor do you have the ability to decide what the law is(praise God).

Your statement of income not being “gain, profit and privilege” is based on your opinion and not the opinion of SCOTUS. It therefore, would be in direct conflict with the SCOTUS decisions. This is true until you say income tax is “taxable income = gross income less deductions”. You neglect the fact that “income tax” is above the very top of the pyramid. “Taxable income” is directly below “income tax”. Below income tax, is gross income less deductions and so forth, all the way down to “wages”.

Using this theory you present, I need not look any further than gross income less deductions to conclude that my labor is not taxable income. Simply put, there are no deductions for labor. Therefore, “taxable income” is not present. Your theory is flawed at step 2.

Wrong. There is no need for deductions for labor to get to taxable income. Congress decides what is deductible when the law was enacted. BTW, there is not a single SCOTUS decisions that supports what you say unless you take a quote completely out of context.

Since a labor is certainly taxed indirectly, you simply cannot use your theory to derive an income tax. As I said, it would be flawed at step 2 of the process of figuring the amount of income tax. The end result would be a direct tax on your labor. Meaning, there is no way to “shift the burden” onto someone else, resulting in a direct tax. Only a complete drooling dunce still believes that the income tax is a direct tax.

Again, no court has ever said what you just said. However, there are plenty of court decisions that state that WAGES ARE INCOME. In Cheek v. United States, 498 U.S. 192 (1991), the court states,

It was therefore error to instruct the jury to disregard evidence of Cheek's understanding that, within the meaning of the tax laws, he was not a person required to file a return or to pay income taxes and that wages are not taxable income, as incredible as such misunderstandings of and beliefs about the law might be.

http://bulk.resource.org/courts.gov/c/U ... 9-658.html

That said my friends, is where “privileged activity” enters the “income tax”. Taxing everyone on their labor would otherwise result in a direct tax. That is obviously not the case. The tax is therefore NOT on labor, it is on a privilege granted by government. You may piss and moan about this all you want. If you want to argue about it, take it up with SCOTUS, not me.

This is how the government crafted its way directly into the laborers back pocket. The one condition is that a government granted privilege must be present. Anyone bypassing that condition, results in a direct tax. Again, SCOTUS has determined that the income tax always has been an indirect tax. The 16th amendment did not change that fact. Again, if you want to argue about that, take it up in court, not me.

Wrong. The 'privelege' argument has been rejected time and time and time again. Read United States v. Sloan, 939 F.2d 499, 501 (7th Cir. 1991), cert. den. 112 S.Ct. 940 (1992).
http://bulk.resource.org/courts.gov/c/F ... -3154.html
Before you say, "but that's not a SCOTUS decision", you need to look up what "cert. den." means.

<SNIP>

I think that should about cover shooting down any of your opinions thus far. Your opinions never really had merit to begin with, I just wanted to point it out with supporting documentation. Your ill conceived notions on how taxing wages works, is understandable. After all, the understanding has been hidden away by your buddies at the IRS and miscreants in congress for a long, long time.

None of our opinions have been shot down because our view on the matter is actually supported by court opinion where yours are not. Famspear, wserra, LPC and a few others will probably point out the errors in your case cites so far.

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.

One more thing before I go, I want to let each of you know that none of this is meant as a personal attack. Everything I say or present here, is only intended to attack information...not people. If this post offends anyone, please try to understand that it was not intended as a personal attack.

I hope that you are truly here with an open mind. Mutter did arrive with an open mind and he saw how flawed CtC was. So far, you have not adequately supported a single contention you have made. In the few responses to you I have given, I have now linked to the full text of two SCOTUS decisions and one Court of Appeals decision. All three cases specifically state that wages are income and/or that all individuals must pay a federal income tax on their wages.

From a earlier post in the other thread...In Lukhard v. Reed, 481 U.S. 368, 375 (1987), the Supreme Court discusses a personal injury award to compensate a person for lost wages. The court said that since the award was to compensate a person for lost wages and since wages would be income that the part of the award that replaces it must be income. You can read it for yourself at http://bulk.resource.org/courts.gov/c/U ... -1358.html Pay close attention to paragraph 6 where the court says,

But the premise that personal injury awards cannot involve gain is obviously false, since they often are intended in significant part to compensate for the loss of gain, e.g., lost wages. See Watkins v. Blinzinger, 789 F.2d, at 476. Since the gain would have been income, surely at least that part of a personal injury award that replaces it must also be income.

One last thing, I called you dense in an earlier post in the other thread. I should have been more polite and I apologize.

[Famspear]

Dear MN Stix: Although this is repetitive, I am posting this here - copied from another recent thread.

Some tax protesters argue that they should be immune from federal income taxation [ . . . ] on the ground that they have not requested a privilege or benefit from the government. These kinds of arguments have been ruled without merit. For example, in the case of Lovell v. United States the United States Court of Appeals for the Seventh Circuit stated:

Plaintiffs argue first that they are exempt from federal taxation because they are "natural individuals" who have not "requested, obtained or exercised any, privilege from an agency of government." This is not a basis for an exemption from federal income tax. [ . . . ] All individuals, natural or unnatural, must pay federal income tax on their wages, regardless of whether they received any "privileges" from the government.

--Lovell v. United States, 755 F.2d 517, 85-1 U.S. Tax Cas. (CCH) paragr. 9208 (7th Cir. 1984).

The argument that an individual who received Form W-2 wages or other compensation is not subject to federal income tax because the individual has "neither requested, obtained, nor exercised any privilege from an agency of government" was ruled frivolous by the United States Court of Appeals for the First Circuit in Sullivan v. United States, 788 F.2d 813, 86-1 U.S. Tax Cas. (CCH) paragr. 9343 (1st Cir. 1986), and again in Kelly v. United States, 789 F.2d 94, 86-1 U.S. Tax Cas. (CCH) paragr. 9388 (1st Cir. 1986).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the tax is imposed in connection with "government granted privileges" was ruled frivolous by the United States Court of Appeals for the Seventh Circuit in Coleman v. Commissioner, 791 F.2d 68, 86-1 U.S. Tax Cas. (CCH) paragr. 9401 (7th Cir. 1986).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the taxpayer enjoys a "grant of privilege or franchise" was ruled frivolous by the United States Court of Appeals for the Eighth Circuit in May v. Commissioner, 752 F.2d 1301, 85-1 U.S. Tax Cas. (CCH) paragr. 9156 (8th Cir. 1985).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the taxpayer has obtained a "privilege from a governmental agency" was ruled frivolous by the United States Court of Appeals for the Ninth Circuit in Olson v. United States, 760 F.2d 1003, 85-1 U.S. Tax Cas. (CCH) paragr. 9401 (9th Cir. 1985), and by the United States Court of Appeals for the Tenth Circuit in Prout v. United States, 31 Fed Appx. 624, 2002-1 U.S. Tax Cas. (CCH) paragr. 50,304 (10th Cir. 2002) (not for public.).

Regarding the taxability of income in connection with events or activities not involving a government privilege or franchise, the United States Supreme Court ruled in Rutkin v. United States that the receipt of money obtained by extortion is taxable as income to the wrongdoer. Rutkin v. United States, 343 U.S. 130 (1952). I don't think extortion involves the exercise of a privilege, federal or otherwise.

The U.S. Supreme Court ruled in James v. United States that the receipt of money obtained through embezzlement is taxable as income to the wrongdoer, even though the wrongdoer is required to return the money to its owner. James v. United States, 366 U.S. 213 (1961). And please: There simply is no "privilege" to embezzle money.

All the cases I cited involved taxpayers who made these arguments, and the courts ruled against these arguments. These are not cases where quotes are simply taken out of context, where the case was really about "something else." These are not cases involving fake quotes. These citations are not tax protester tricks.

Pete Hendrickson tries to fool his followers into thinking that there is something in these kinds of cases that somehow makes the holdings in these cases not apply to his Cracking the Code scam. He is wrong.

And Hendrickson's scam has been specifically rejected in at least one federal case -- where Hendrickson and Cracking the Code were specifically mentioned by the court. As noted in the Tax Protester Dossiers web site (the companion to Daniel B. Evans' Tax Protester FAQ), in the case of Hendrickson acolyte Andrew D. Scott, the United States Tax Court noted that Scott had informed the IRS that he was a follower of Hendrickson's book, Cracking the Code. The IRS had warned Scott that Hendrickson’s arguments had been repeatedly rejected by the courts. Scott lost the case, and had stiff monetary penalties imposed on him for presenting frivolous arguments.

[Cpt Banjo]

Over at the Lost Horizons site, Mn Stix has posted the following regarding the Cryer case:

Realize that everyone at Quatloos thumbed their nose at Mr. Cryer. What none realized is that this case was planned out long before the IRS ever stepped in. Beautifully thought out and played out by Mr. Cryer, Mr. Becraft and all others involved. Quatloosians believe that the government has a hope in hell to get a conviction in civil court. The groundwork has been laid out in the criminal case and an attempt by the government to sue in a civil court is doomed.

Mn Stix, you don’t realize that every single one of Cryer’s legal arguments as to why his income wasn’t taxable was rejected by the court. Every one. The only reason he was acquitted was that he was able to persuade the jury that he didn’t act willfully -- i.e., that he had a sincere belief that the law didn’t require him to pay taxes on his income. In some circles, this is known as the “I-was-too-stupid-to know-the-law” defense, although its technical name is the Cheek defense, named after the defendant in a Supreme Court decision in which the legal requirements to prove willfulness were laid out.

But this defense isn’t applicable in a civil proceeding to collect Cryer’s back taxes. Just ask Vernice Kuglin who, like Cryer, was acquitted on criminal charges only to later settle her tax bill with the IRS for about $500,000, which included over $200,000 in penalties and interest. No, the civil issue for Cryer is simply whether the taxes were owed, and no element of willfulness is required in order that he be held liable. In other words, he won't be able to avoid the tax by arguing about how sincere his belief was. Oh sure, he may raise his crackpot legal arguments, but since they're all frivolous they'll be rejected just as they have been in coultless other cases.

In short, when it comes to his civil liability, Cryer is toast.

[MN Stix]

Damn folks, one at a time. You can’t possibly expect me to reply to everyone. I simply do not have the time. I simply cannot give any proper and well deserving thought by just crapping out responses;) You all will be held liable for any permanent injuries due to keyboard cramping (Im getting old you know )

Nikki, the points to ponder you provide will be taken special note of. I will give serious consideration to each, thank you.

Next, very quickly Ryan said:

“On LostHorizons you said: "We are endowed by our creator, the right to the fruits of our labor as protected by the constitution."

So I pointed out the constitution of the United States did not even contain the word "fruits" or even "labor".

You now cite the Declaration of Independence as the source for you having the right to the "fruits of your labor", unfortunately, no part of the Delaration that you cited mention the "fruits of your labor", and infact, neither "fruits" or "labor" appear anywhere in the Delcaration of Independence either.

I may very well be a fool, but you haven't shown how the "fruits of your labor" are protected or even mentioned by either the US Constitution or the Declaration of Independence”

You said it, PROTECTED by the constitution, not given by the constitution. Unfortunately ryan, you are incorrect. The Declaration does acknowledge the “fruits of my labor” in my right to life. My labor is a part of that life, no part of it may be taken or infringed on by any man, government or otherwise. The Constitution does not grant rights, it protects them. The Bill of rights are those granted by the people. Those are not rights, they are privileges as they can be given or taken away at anytime by government. No sir, my rights come from the almighty, no one may take or infringe on any way. Taxing my labor is an infringement on the most sacred right.


“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:”

I’m sorry to hear that Doc. My views and statements on LH are borderline for certain. I do acknowledge that repeatedly. I also understand and welcome any corrections the admin may choose to make.

Quickly moving along, “an exise does not have to be avoidable.” Such is the case in the inheritance tax. Again…damn, I will look at those cases firstly, I just do not have the time…the inheritance tax involves an amount of money that the person receipt did not earn through any means of labor. Unfortunately, a labor or love, just does not cut it. As I said, I will go through the cases, but can already point out a flaw.

Famspear, I will just brush the surface of one of the many points you bring forward. That is

“ Neither the United States Supreme Court nor any other federal court has ever ruled that for a federal income tax to be valid, it must involve the exercise of a privilege. Never. Not even once.”

You have missed the point, the exercise of privilege is included as a taxed ITEM, not something to be relied as a sole test of income. The privilege itself is included as a taxed item. Not a test to determine whether something is taxable(did I just say that twice? Oh well, the point needed to be underlined). The privilege itself is taxable and as chance would have it, just happens to be avoidable.

And

“No. Wrong. And there’s a simple test. Go find a federal court case where someone argued that the federal income tax was required to be imposed on a privilege, and the court ruled in that person’s favor. There is no such Supreme Court case. There is no such federal court case at all. None. Not even one.”

The above quote is meant to be included in my above response. I do thank you for pointing these things out and I agree with you. Unfortunately, you twisted the intent as I pointed out above.

That is really all I have time for today. I will quickly read through all posts so as each is obviously deserving of genuine thought 

Peace for now, and thank you all for your input

[Famspear]

Dear MN Stix: Getting back to the "fruits of the labor" argument, this is an example of the line of "reasoning". Whether the fruits of your labor are an unalienable right, or however you want to word it, the issue is whether the Congress may constitutionally impose a federal income tax on your labor or the fruits of your labor, or on your unalienable right to the fruits of your labor, etc., etc., etc.

And the answer is that Congress may constitutionally do so. NO FEDERAL COURT HAS EVER RULED THAT CONGRESS MAY NOT VALIDLY IMPOSE AN INCOME TAX ON YOUR LABOR, THE FRUITS OF YOUR LABOR, THE UNALIENABLE RIGHT TO THE FRUITS OF YOUR LABOR, etc., etc., regardless of how you want to word it.

It is a mistake to infer that merely because you have an "unalienable" right to the fruits of your labor, the Congress may not tax those fruits. That's not what the courts have ruled, that's not what the Constitution says, that's not what the Declaration of Independence says. Again, you are engaging the fallacy of "chaining" -- tying verbiage from the texts of different court opinions and other sources together, and then arguing that the material means "something else." This is taking things out of context.

Worse, this is not legal analysis.

Over in Wikipedia, they have a rule called "No Original Research." This does not literally mean "no original research" in the sense in what many people would take that term. It's a term of art. But one aspect of the Wikipedia rule is that you cannot take Statement A from Source 1 and Statement B from Source 2 and Statement C from Source 3 and then insert, into an article your own Conclusion D -- where Conclusion D is not something stated by Source 1 and Source 2 and Source 3. The prohibition on this kind of "original research" in Wikipedia is a good rule for what should be an obvious reason. As an open encyclopedia, thousands of people want to use Wikipedia to promulgate their own pet theories.

Likewise, in the legal realm, taking Statement A from Case 1 and Statement B from Case 2 and Statement C from Case 3 and then coming up with Conclusion D is absolutely incorrect in this context - especially where the various statements are, at best obiter dicta and where cases 1, 2 and 3 did not even involve the issue supposedly covered by Conclusion D AND TO TOP IT ALL OFF, every single case that DOES involve the issue in Conclusion D actually contradicts Conclusion D.

This faulty process is the process by which tax protesters take verbiage from cases like Coppage and Butchers in which the Supreme Court not only did not rule at all on the tax protester's contention, but did not even rule on taxes at all -- the issue of the validity of a federal tax was not even presented to the Court, much less decided.

Hendrickson's "work" is full of this kind of nonsense. Henrickson is a guy who can't tell the stare decisis effect of a case from the obiter dicta. Hendrickson is a guy who argues about subject matter jurisdiction in a court of law when he clearly does not even know what the term means. This is a guy who argues that because of some provision of the Revenue Act of 1862, he does not owe federal income tax, under the Internal Revenue Code of 1986, as amended, on his private-sector, non-federally privileged compensation, or however he words his theory -- even though that very statute, the 1862 Act, explicitly imposed the federal income tax on U.S. residents generally. The text of the 1862 Act is available at virtually any large law library.

I will give Hendrickson one thing: his scam is more elaborate than those of most other tax protester-tax deniers. He mixes his own nonsense with some sprinklings of accurate statements about the law, and he correctly exposes the fallacies committed by certain other tax deniers. Hendrickson's ability with words and his "honesty" in exposing other tax deniers may, to some extent, actually mislead some of his followers into believing in him and his Cracking the Code nonsense - even though there is very little that is new or original in his theories.

[Amateur psychologist mode = on]Part of Hendrickson's downfall is that he is extremely narcissistic. This psychological disorder is characterized by an infantile, delusional belief that oneself is omnipotent. Hendrickson, as a person with Narcissistic Personality Disorder, lacks some of the psychological protectors that most people have to prevent them from getting into trouble. Although Hendrickson has plunged into a couple of mind-numbingly complex, technical fields in which he obviously is sorely lacking in ability (specifically, law and accounting), he lacks the psychological tools that protect the average person from getting in over his head.

Hendrickson was apparently involved in the Libertarian movement in the early 1990s, and that activity got him in serious federal criminal trouble, for which he served prison time. Although most Libertarians are law-abiding, Hendrickson's narcissism coupled with other, possibly unknown personality flaws, pushed him into criminality.

After prison, Hendrickson did not learn his lesson. The tax scam that became Cracking the Code and losthorizons developed. [Amateur psychologist mode = off]

Now Hendrickson faces a far more serious threat to himself and his family - a threat he has needlessly created by his own actions. And, whether he is convicted or acquitted in his upcoming trial, his federal tax problems will continue.

EDIT: Famspear has demonstrated that he is not omnipotent -- by having to go back and correct his spelling of the word itself -- from "ominpotent" to "omnipotent" in the text above.

[Famspear]

Damn folks, one at a time. You can’t possibly expect me to reply to everyone. I simply do not have the time. I simply cannot give any proper and well deserving thought by just crapping out responses;) You all will be held liable for any permanent injuries due to keyboard cramping (Im getting old you know )

Absolutely. Take your time. There is no need to reply to everything right now. We're glad you're here.

[MN Stix]

Over at the Lost Horizons site, Mn Stix has posted the following regarding the Cryer case:

Realize that everyone at Quatloos thumbed their nose at Mr. Cryer. What none realized is that this case was planned out long before the IRS ever stepped in. Beautifully thought out and played out by Mr. Cryer, Mr. Becraft and all others involved. Quatloosians believe that the government has a hope in hell to get a conviction in civil court. The groundwork has been laid out in the criminal case and an attempt by the government to sue in a civil court is doomed.

Mn Stix, you don’t realize that every single one of Cryer’s legal arguments as to why his income wasn’t taxable was rejected by the court. Every one. The only reason he was acquitted was that he was able to persuade the jury that he didn’t act willfully -- i.e., that he had a sincere belief that the law didn’t require him to pay taxes on his income. In some circles, this is known as the “I-was-too-stupid-to know-the-law” defense, although its technical name is the Cheek defense, named after the defendant in a Supreme Court decision in which the legal requirements to prove willfulness were laid out.

But this defense isn’t applicable in a civil proceeding to collect Cryer’s back taxes. Just ask Vernice Kuglin who, like Cryer, was acquitted on criminal charges only to later settle her tax bill with the IRS for about $500,000, which included over $200,000 in penalties and interest. No, the civil issue for Cryer is simply whether the taxes were owed, and no element of willfulness is required in order that he be held liable. In other words, he won't be able to avoid the tax by arguing about how sincere his belief was. Oh sure, he may raise his crackpot legal arguments, but since they're all frivolous they'll be rejected just as they have been in coultless other cases.

In short, when it comes to his civil liability, Cryer is toast.

Damn, you caught me for one more post. You do realize that Cryer had this all planned in advance right? Yes, I do realize that his arguments were rejected by the court. You seem to not understand why that is. Simply put, the issue at hand had nothing to do with paying a tax. It did have to do with a responsibility to report income and IF he willfully neglected that duty. It had nothing to do with why his income was not taxable.

I have my own views as to what he is doing. I will reserve those views until the day comes (if it ever will) that the IRS sues in civil court. As much as want to share what it is he is actually up to, I will not. No matter how you feel the case turns out, I promise you I will still get to chuckle about it in the end.

Anyway, nothing here to support with evidence. It simply amounts to your opinion and of course, my opinion. Two hands full of opinion doesn't decide law.

[Dr. Caligari]

Absolutely. Take your time. There is no need to reply to everything right now. We're glad you're here.

I agree. MN Stix, I know you're being tag-teamed here, and need time to read (much less respond to) everything. But if there is only one SCOTUS case you read, I urge you to read this one: Steward Machine Co. v. Davis (1937) http://caselaw.lp.findlaw.com/cgi-bin/g ... &invol=548:

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.

[Famspear]

Anyway, nothing here to support with evidence. It simply amounts to your opinion and of course, my opinion. Two hands full of opinion doesn't decide law.

Dear MN Stix: We're not here to decide the law. The law is what we say it is -- not because we say so, but because we know how to analyze legal materials correctly. Pete Hendrickson does not use proper legal analysis. He is wrong. We are right.

We're here to explain the law to you. We didn't make the rules. Whether you reject what is presented to you here or not, what we present to you is still the law. The Courts have indeed ruled the way we say they have ruled, not the way Hendrickson says they have ruled.

Debating this, even endlessly debating this point, does not change the point that we are correct and Hendrickson is incorrect.

And there is no downside to us for being correct in the way we have described the law to you.

By contrast, there is a huge potential downside for those of Hendrickson's followers who refuse to accept what we say here at Quatloos. Again, this is not because we are the ones who are saying it, or because we are so smart. This is because we happen to be correct about what the federal income tax law is, and because following Hendrickson's Cracking the Code -- actually filing tax returns that way -- is a criminal offense, unless the person following Hendrickson has an actual good faith belief based on a misunderstanding caused by the complexity of the tax law (the Cheek doctrine). The test for willfulness is the voluntary, intentional violation of a known legal duty -- and the courts have indicated -- at least in non-binding dicta -- that evidence of your own awareness of the existence of court decisions that contradict your belief about what the law is may be used against you in court.

And what that means is that if you are ever charged with a federal tax crime in connection with Cracking the Code (which I admit is unlikely, as there are only a few federal criminal tax prosecutions each year), and the prosecution can persuade the jury that you were aware of the court cases I and others listed above, the jury might find you guilty -- on that basis. It's up to the jury to decide, though.

[Demosthenes]

Taxing my labor is an infringement on the most sacred right.

Your labor isn't being taxed. Your income is.

If I mow the lawn for my neighbor (perform labor) and she pays me $42, I'm taxed on $42.

If I mow my own lawn (same labor is performed), I don't pay any income taxes.

Labor isn't taxed. Income is.

[Famspear]

MN Stix wrote:

Taxing my labor is an infringement on the most sacred right.

Fine, I respect your opinion. But that's not the law. Look for a federal court case where (1) someone fought with the government in court over whether that person owed federal income tax, (2) that person actually argued in that court case that taxing his labor, or the income from his labor, or using any other such similar words you want to use, was an "infringement" on that person's most sacred right, and (3) the person actually argued that the tax in question was therefore legally invalid or otherwise unconstitutional, and (4) the court ruled that this person's argument was correct.

MN Stix, none of the cases you have cited fit that description. And the description I just gave you is a rough description of the legal analysis, the steps that a lawyer must go through, to find a holding, an actual court ruling, in a court case that is "on point." The mere fact that you are quoting from the text of a court opinion does not mean that your view of the law is correct. Instead, you must use a statement in a court opinion that has what we call precedential effect, or stare decisis effect.

Stare decisis is the policy of the court to stand by precedent; the term is but an abbreviation of stare decisis et quieta non movere — "to stand by and adhere to decisions and not disturb what is settled." Consider the word "decisis." The word means, literally and legally, the decision. Nor is the doctrine stare dictis; it is not "to stand by or keep to what was said." Nor is the doctrine stare rationibus decidendi — "to keep to the rationes decidendi of past cases." Rather, under the doctrine of stare decisis a case is important only for what it decides — for the "what," not for the "why," and not for the "how." Insofar as precedent is concerned, stare decisis is important only for the decision, for the detailed legal consequence following a detailed set of facts.

--United States Internal Revenue Serv. v. Osborne (In re Osborne), 76 F.3d 306, 96-1 U.S. Tax Cas. (CCH) paragr. 50,185 (9th Cir. 1996).

It is not enough to quote the texts of court opinions in cases where the individual did not obtain a court ruling that says what you are saying. What we are explaining here is what the law actually is.

[Famspear]

Dear MN Stix: I notice that you and Mutter are discussing the Cryer criminal case over at losthorizons. For what it's worth, here's some detail about that case, from something I posted elsewhere.

Cryer filed four motions to dismiss the case against him.

The government responded by stating that Cryer, “asserted various tax protester claims...and courts have rejected and discredited these claims” and countered Cryer's claim that the income generated from his law practice is not taxable, citing Commissioner v. Kowalski, 434 U.S. 77 (1977) (payments are considered income where the payments are undeniably accessions to wealth, clearly realized, and over which taxpayer has complete dominion); Lonsdale v. Commissioner, 661 F.2d 71, 72 (5th Cir. 1981) (rejecting taxpayer's contention that the “exchange of services for money is a zero-sum transaction”); Reading v. Commissioner, 70 T.C. 730 (1978), aff'd, 614 F.2d 159 (8th Cir. 1980) (monies received from the sale of one's services constitute income within the meaning of the Sixteenth Amendment). Government's in Globo Response to Defendant's Motions to Dismiss, Motions to Compel Discovery, and Motion in Limine, Feb. 15, 2007, docket entry 26, United States v. Cryer, case no. 5:06-cr-50164-SMH-MLH-ALL, U.S. District Court for the Western District of Louisiana, Shreveport Division.

The court rejected Cryer's first motion, in which Cryer had contended that the indictment had failed to allege "affirmative acts." Memorandum Order, March 19, 2007, docket entry 35, United States v. Cryer, case no. 5:06-cr-50164-SMH-MLH-ALL, U.S. District Court for the Western District of Louisiana, Shreveport Division. The court rejected Cryer's second motion, in which Cryer had argued that the Secretary of the Treasury had failed to comply with the Administrative Procedure Act by not publishing certain information in the Federal Register. The court rejected Cryer's third motion, in which Cryer had asked for dismissal on the ground that he had not, with respect to a trust mentioned in the indictment, created that trust for the purpose of evading taxes. The court rejected Cryer's fourth motion to dismiss, in which Cryer contended that his income, which was derived through the practice of law in Louisiana, was not "taxable income" as defined by the Internal Revenue Code, ruling the contention to be "without merit."

The prosecution dropped its allegations of tax evasion (on which the law provides a maximum prison term of five years) against Cryer on July 9, 2007. Cryer was then tried on two counts of willful failure to file tax returns, for which the maximum jail sentence is one year in prison.

Cryer was found not guilty by the jury. The key here is that had Cryer's legal arguments been ruled to be correct, this not guilty jury verdict would have never happened.

Why?

Because the whole purpose of Cryer's four motions was to get the case against him thrown out. The whole purpose was to avoid having to go to the jury. That's why you file motions to have a case thrown out.

You know the expression, winning the battle and losing the war? Well, as far as Cryer's personal freedom is concerned, Cryer lost the battle but ended up winning the war. He was found not guilty by the jury.

Now the jury did not "rule" that Cryer was correct on what the law is. And, in court, Cryer and his attorney Larry Becraft did not argue that Cryer was correct on what the law is. In fact, either Cryer or Becraft admitted that they were not allowed to make that argument in court -- I heard that in a webcast interview I personally heard on the internet a day or two after the verdict.

Instead, what Cryer presented was what is known as a Cheek defense. Say what you want about Cryer and Becraft, but they are both attorneys and they are both smart. My understanding of the case is that what Cryer argued was that his conduct was not willful.

In the United States, a jury does not render a judgment, or ruling, on what the law is.

Juries issue what we call verdicts. In a criminal case, that means "guilty" or "not guilty." A jury finding of "not guilty" is not a "ruling" that the defendant's arguments about "what the law is" were correct. In fact, neither the prosecution nor the defendant in a criminal case (nor the plaintiff nor the defendant in a civil case) is allowed to argue to the jury itself that the law is this, or the law is that. Arguments about what the law is are presented only to the judge, who renders a ruling.

And that's what happened in Cryer's case. Cryer argued to the judge that the law was THIS (see the description of the motions above) -- and the judge rejected those arguments. The case went to the jury, which found him not guilty.

Think of it this way: This didn't happen, but if O.J. Simpson had gone into court in his criminal trial and had argued that "there is no law against murder" and the jury found him "not guilty", that would not mean that the jury had ruled that there is no law against murder. Juries cannot render legal judgments about anything, much less legal judgments on "what the law is." Juries issue only verdicts. Even after a jury renders a verdict of "guilty," the defendant is not really "convicted" until the judge renders a "judgment" on that.

Your quest for support from Cryer's situation is for naught.

EDIT: In the webcast I refer to, I just don't remember whether it was Cryer or Becraft who made the admission about not being allowed to argued the law itself to the jury. I think both of them may have been participating in the web cast, but I don't remember which one made the statement.

[Famspear]

Correct me if I am wrong - all that was described above by Famspear dealt with Cyer's CRIMINAL case. Sure he was not convicted (found guilty) of any crime, BUT, and this is huge, I believe he still had to pay the taxes, interest and penalties.

So, while some may crow that Cryer was a great victory, in reality, he won a key battle (being found not guilty on criminal charges), but lost the war (still owed the taxes, interest and penalties). Overall, that is a defeat.

Ah, but I was much too polite to point that out.......

And those oversized letters above were just an accident......

[jg]

One more item to consider when you cite or discuss Flint v. Stone Tracy Co. or any other decision that is in regard to the Corporate Tax Act of 1909 is that the Supreme Court in 1913 said:

The Corporation Tax Law of 1909, having been enacted before the ratification of the Sixteenth Amendment, was not in any proper sense an income tax law; but was an excise tax upon the conduct of business in a corporate capacity measured by the income, with certain qualifications prescribed by the act itself.

Hendrickson and others seem to try to force the income tax to adhere to what the Court said about the Corporate Tax Act (often by quoting from Flint v. Stone Tracy Co.) ; but the court itself drew a very clear distinction between that excise tax and an income tax law. What the court said about an excise tax in Flint v. Stone Tracy Co. may well apply to any excise tax; but it may or may not apply to taxes other than an excise tax that are in the category of excise taxes (or that are in their nature an excise tax) such as an income tax. All but one of the justices on the case in 1913 had been on the panel in 1909 that decided Flint v. Stone Tracy.
The decision in Stratton's Independence, Ltd. v. Howbert, 231 U.S. 399 (1913)
is in full at http://supreme.justia.com/us/231/399/case.html

Perhaps the confusion or misinterpretation is based on the fact that "excise tax" is used to refer to both a specific type of tax and to a class of taxes.
I do hope this helps.