Now, a losthorizons user called "mattdig" has committed what might be considered a social faux pas at Hendrickson's web site - citing cases that show Pete Hendrickson's
Cracking the Code tax scam to be -- a scam.
User ericcalderon had previously written:
My last post was not very clear-
Did any of the lost cases argue that private sector pay did not amount to wages as defined in title 26? If so, what are the citations for these cases?
Thanks
"mattdig" responded:
Eric, here is a post from the freedomwatch website where a guy was commenting against CTC beliefs, note that I have not checked this info for accuracy, it is only quoted from a posting. The guy was obviously there to discourage people from voting, anyway here is what he said.
Here is the material copied and pasted (from the freedomwatch site) by "mattdig":
One of the keys to Hendrickson's tax scheme is the frivolous argument about the terms "includes" and "including" and "employee."
Hendrickson (and many others before him) have argued that for Federal income tax purposes, the term "employee" under Internal Revenue Code section 3401(c) does not include a regular, private-sector employee. The courts have uniformly rejected this argument. The text of section 3401(c), which deals only with the employer's withholding requirements and not with the employee's requirement to report compensation for personal services (whether called wages, salaries, or any other term), is as follows:
-----For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.
Internal Revenue Code section 3401(c)
In ''Sullivan v. United States'', taxpayer Grant W. Sullivan argued that he had not received “wages” and was not an “employee” under Internal Revenue Code section 3401(c). The United States Court of Appeals for the First Circuit ruled against Sullivan, stating:
-----To the extent Sullivan argues that he received no “wages” in 1983 because he was not an “employee” within the meaning of 26 U.S.C. §3401(c), that contention is meritless. Section 3401(c), which relates to income tax withholding, indicates that the definition of “employee” includes government officers and employees, elected officials, and corporate officers. The statute does not purport to limit withholding to the persons listed therein.
''Sullivan v. United States'', 788 F.2d 813, 86-1 U.S. Tax Cas. (CCH) paragr. 9343 (1st Cir. 1986) (''per curiam'').
In ''United States v. Ferguson'', taxpayer Joy Ferguson -- a follower of Peter Hendrickson -- argued that she was not an “employee” under section 3401(c), and that she therefore could not have “wages.” The court ruled against her, stating:
-----The core of the dispute before the court is Ferguson's assertion that she was not an “employee” as defined by §3401(c) of the Internal Revenue Code, and therefore did not earn any "wages." . . . . As such, she argues that her Form 1040 and Form 4862 [sic; probably should read "4852"] accurately reported her wages as zero. As noted by the government, Ferguson's interpretation of §3401(c) has been considered and rejected numerous times by many courts. This Court would agree with the overwhelming precedent on this issue, Ferguson's argument that she is not an employee as defined by §3401(c) is frivolous.
''United States v. Ferguson'', 2007-1 U.S. Tax Cas. (CCH) paragr. 50,461 (D. Nev. 2007).
In ''Luesse v. United States'', taxpayer Chell C. Luesse of St. Louis Park, Minnesota, argued that he received no “wages” because he was not an “employee” under section 3401(c). The court ruled against Mr. Luesse. See ''Luesse v. United States'', 84-1 U.S. Tax Cas. (CCH) paragr. 9389 (D. Minn. 1984).
In ''Richey v. Stewart'', the court stated:
-----Another familiar argument from Mr. Richey [the taxpayer] is that he is not an employee under the terms of the Internal Revenue Code, citing Section 3401(c), which states that the term “employee” includes government employees. What Mr. Richey misapprises in his reading of the statute is the inclusionary nature of the language. The Code does not exclude all other persons from taxation who are not government employees.
''Richey v. Stewart'', 84-2 U.S. Tax Cas. (CCH) paragr. 9642 (S.D. Ind. 1984).
In ''United States v. Charboneau'', the court stated:
-----[ . . . ] Ms. Charboneau contends that the Code's definitions of "wage income" and "self employment income" only include income derived from individuals who work for the federal government, or whose work involves that of "the performance of the functions of a public office." Because Ms. Charboneau never worked for any federal or state government during the tax years in question, she claims that the IRS cannot make any tax assessments against her.
-----This nonsensical argument is belied by the plain language of the Internal Revenue Code itself. For example, 26 U.S.C. §3401 defines wages as "all remuneration (other than fees paid to a public official) for services performed by an employee for his employer...." 26 U.S.C. §3401(a) (emphasis added). The statute then goes on to define various exceptions to this broad definition of wages in certain categories of private employment, such as in the agricultural and domestic service fields, newspaper delivery, the clergy, and for wages incurred by individuals working for employers "other than the United States or an agency therof" within Puerto Rico or a possession of the United States. There is nothing in the statute limiting "wages" to solely publicly-derived income. [footnotes omitted]
-----Ms. Charboneau, however, focuses on §3401(c), which states that:
---------------the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.
-----26 U.S.C. §3401(c). Setting aside the last sentence of this provision, which clearly states that officers of private corporations are considered employees for purposes of determining wages, it is obvious that within the context of this statute that the word "includes" is a term of enlargement, not of limitation, and the reference to certain public officers and employees was not intended to exclude all others. See also ''Sims v. United States'', 359 U.S. 108, 112-13 (1959) ([the United States Supreme Court ruling] ..... that a similar provision in 26 U.S.C. §6331 dealing with levies on salaries and wages does not exclude wages of private citizens); ''Sullivan v. United States'', 788 F.2d 813,815 ("[Section 3401(c)] does not purport to limit withholding to persons listed therein"); ''United States v. Latham'', 754 F.2d 747, 750 (7th Cir, 1985) (the Internal Revenue Code definition of “employee” in 26 U.S.C. §3401 does not exclude privately employed wage earners);. In addition, 26 U.S.C. §7701, which provides the definitions of terms used throughout the Internal Revenue Code, states that the "terms 'includes' and 'including' when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined." 26 U.S.C. §7701(c).
''United States v. Charboneau'', 2006-2 U.S. Tax Cas. (CCH) paragr. 50,507 (M.D. Fla. 2006).
In ''McCoy v. United States'', the court stated:
-----McCoy argues she should not have to pay taxes for 1996-98 because under Code Section 3401 she was not an “employee” which she contends is defined as an elected or appointed employee or official of the federal government. McCoy clearly misconstrues Section 3401(c). The definition of “employee” includes private-sector employees, employees of the federal government, as well as elected and appointed officials. The very language of the Code is inclusive, not limited to the examples of included persons.
''McCoy v. United States'', 2001 U.S. Dist. LEXIS 18986, 2001-2 U.S. Tax Cas. (CCH) paragr. 50,787 (N.D. Tex. 2001) (footnotes omitted).
The argument that only certain types of taxpayers (such as only Federal government employees, corporations, nonresident aliens, residents of the District of Columbia, or residents of Federal territories) are subject to income tax and employment tax, and variations of this argument, have been officially identified as legally frivolous Federal tax return positions for purposes of the $5,000 frivolous tax return penalty imposed under Internal Revenue Code section 6702(a).
Peter Hendrickson tries to argue about the nuances in Sullivan and other cases -- to fool his followers into thinking that the holdings of the courts in those cases do not apply to his particular version of the scheme. Hendrickson is wrong.
Further, as noted in an earlier post, the courts have specifically referred to Peter Hendrickson by name in some of the more recent cases. Many of Hendrickson's followers still believe that Hendrickson is still appealing his court loss. Hendrickson has posted what purports to be a petition for writ of certiorari to the Supreme Court on his web site. Based on what I have read, he may well file the petition soon. As of this afternoon, April 22, the Supreme Court listed nothing on file, though. And, in any case, it is highly unlikely that the Court will even hear Hendrickson's case. As far as the chance of his obtaining a court ruling that his scheme is valid, there is about as much chance of that as there is a chance that Hendrickson will land on the planet Saturn later today.
http://www.losthorizons.com/phpBB/viewt ... 6162#16162
On this last point, I check a few minutes ago; the U.S. Supreme Court docket still shows no recent petition by Peter Hendrickson (as of afternoon of Monday, April 27, 2009).
"My greatest fear is that the audience will beat me to the punch line." -- David Mamet
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