Summons, Sanctions, and More

[Prof]

Dear David Merrill: Yes, I don't know the context of your reference to these statutes. I will say that what your quote appears to be an excerpt of section 6323(f)(1)(B), which would apply only in certain states (not sure which ones). I think the provision that would apply in many if not most states would be section 6323(f)(1)(A).

By the way, do you know the basic purpose of section 6323? This is a not trick question - I'm just curious to hear something about the connection between section 6321 and section 6323. (I do sometimes ask trick questions, but I'll try to label them as such when I ask them.) Yours, Famspear

Response for Famspear and LPC:

Lay readers should keep in mind that there are really only three types of liens:

(1.) Consensual liens, granted by the property owner in exchange for financial consideration -- a cash loan, the purchase money necessary to buy the asset, etc.

(2.) Judgment liens, which are the result of a judgment in a lawsuit, and are "abstracted" against realty (attach to realty) by filing in the deed records, but, as to personalty, attach only when non-exempt assets are levied (seized) by process (writ of levy and execution by a sheriff, etc.); levy is followed by a sheriff's sale, called an "execution on the levy."

(3.) Statutory liens, which are created by statute, and usually attach automatically or by unilateral creditor action, without judicial intervention. Tax liens, federal and state, M&M liens, PACA liens, etc., are statutory liens.

As a result of the 1999/2000 amendments to Art. 9, all states now have one central office for filing of general liens against non-real estate assets (except fixtures, crops growing, unharvested timber). Therefore, the IRS tax lien, in order to defeat the priority of non-IRS secured creditors, must be filed with the central office (county filing, for non-real estate related personal property, was abolished nationwide). Note that, for entities that are not human beings, the filing is in the state of organization, giving a big boost the Delaware economy). County filing is still required for crops growing, timber unharvested, fixtures, and the like.

Where the item is subject to special perfection, such as boats, motors, house trailers not permanently affixed to realty, motor vehicles which are not inventory, the IRS rarely (acually, in my experience, never) perfects, because for those items perfection requires notation on the title or some such equivalent. This does not mean that the lien does not attach; just that the lien has no perfection or priority against anyone other than the taxpayer.

The IRS perfects against realty by filing in the local (usually county) real estate records.

Keep in mind that filing of a tax lien is merely a perfection step, and has nothing to do with the effectiveness of the lien against the owner taxpayer.

Of course, state/local ad valorem tax liens, and similar liens, attach and are automatically perfected as first liens ahead of all lenders each Jan. 1, in most states, or, in some, twice a year, I think. Those tax liens are never "filed" -- but on most, there is no personal liability, either.

There are all sorts of statutory liens out there, from PACA to M&M -- all of which attach automatically and some of which require no filing.

And, where state law statutory liens are involved, at least in the states I am familiar with, judicial aciton is required only to FORECLOSE.

[Famspear]

Dear David Merrill:

Oh, and another point: Your implication that the entire Internal Revenue Code has not been enacted into "law" is patently incorrect. Every provision, every word, every punctuation mark, of the entire Internal Revenue Code of 1986, as amended, has been enacted by Congress in the form of -- well, an Act of Congress. Further, every single Act (from the original '54 Code on August 16, 1954 down to the present day) has been (or will be) published at one time or another in various places in the United States Statutes at Large.

Many tax protesters confuse the terms "law" and "positive law." The mere fact that a particular PUBLISHED FORM of a statute is non-positive law does not make it "not law."

I'm not going to go into all the hair splitting and legal technicalities here, at least not yet -- and I suspect this may have been explained to you already at one time or another. Suffice to say, for now:

The Internal Revenue Code of 1954 is positive law. It was enacted by Congress, and published as Volume 68A of the United States Statutes at Large. The Internal Revenue Code of 1986 is simply (hmmm, maybe "simply" is a bad word to use here) the '54 Code as amended up to October 22, 1986 -- with a name change. ALL amendments to the '54/'86 Code -- both before and after October 22, 1986, have been made in the form of ACTS of CONGRESS, all of which have been published in the Statutes at Large. We're not talking about "prima facie" here. We're talking about the Statutes at Large.

Now, there happens to be something called "title 26 of the United States Code." Confusingly, apparently, for many tax protesters, THAT provision is ALSO called the "Internal Revenue Code." Now, the "title 26 version" of the Code is non-positive law.

The point the tax protesters seem to miss is that the "title 26 Internal Revenue Code" is (at least theoretically) IDENTICAL to the "Internal Revenue Code as published in the Statutes at Large." Yes, to the extent there is any variance at all, the text in the Statutes at Large prevails. Title 26 is "prima facie" -- while the Statutes at Large are conclusive.

If I copy the entire Internal Revenue Code on the BACK OF A RESTAURANT MENU (well, it would have to be a pretty big menu) and what I write is EXACTLY what is reflected in the Statutes at Large down to the last comma, then what I have written is THE LAW.

As an aside, most lawyers -- and many or even most government entities, including many courts -- do not even use the official versions of the Statutes at Large or the United States Code. (We also do not use the official versions of case reporters.) We use reprints of the statutes and case law from commercial publishers like West, CCH, etc. And we use online services like Westlaw and Lexis.

To tax protesters everywhere: Don't get hung up on terms like "positive law" and non-positive law." In this context, the terms don't mean what you think they mean. Yours, Famspear

[David Merrill]

Keep in mind that filing of a tax lien is merely a perfection step, and has nothing to do with the effectiveness of the lien against the owner taxpayer.

That one is worthy of to go into a Signature Line - Thanks Prof!

It would seem you have always been way too careful for that kind of blurt - until now. That exemplifies my point and hopefully applies to the context as well. If a lien is not cured properly with process, then it is just me saying Nikki owes me $5K and I wonder why she hasn't paid me yet.

The Quatloser mentality depicted perfectly with Prof's foot in his mouth is that since publishing the NFTL, even improperly, can scare employers, brokers and bankers into diverting funds the lien must have been right all along.


Regards,

David Merrill.

[grammarian44]

Keep in mind that filing of a tax lien is merely a perfection step, and has nothing to do with the effectiveness of the lien against the owner taxpayer.

That one is worthy of to go into a Signature Line - Thanks Prof!

It would seem you have always been way too careful for that kind of blurt - until now. That exemplifies my point and hopefully applies to the context as well. If a lien is not cured properly with process, then it is just me saying Nikki owes me $5K and I wonder why she hasn't paid me yet.

The Quatloser mentality depicted perfectly with Prof's foot in his mouth is that since publishing the NFTL, even improperly, can scare employers, brokers and bankers into diverting funds the lien must have been right all along.

The only thing I'm seeing in your response, David, is that you don't know how to distinguish the effectiveness of a lien from its perfection. And maybe that you don't know the meaning of "nothing to do with" in Prof's post.

[Famspear]

Dear David Merrill: I'm not sure from your syntax if you understand what Prof wrote. What I was trying to get at -- and what Prof is also saying -- is that by law the Federal tax lien under 6321 is legally valid AGAINST THE TAXPAYER without the need to file a Notice of Federal Tax Lien (NFTL).

The purpose of issuing -- and filing -- the NFTL is simply to PERFECT the already existing lien as against THIRD PARTIES, LIKE OTHER PEOPLE TO WHOM THE TAXPAYER OWES MONEY, not against the taxpayer. The NFTL relates to PRIORITY as among your creditors. The lien against the taxpayer is legally valid against the taxpayer, even without an NFTL.

This means that when the IRS comes to seize your property to satisfy YOUR Federal tax liability, and you object on the ground that no NFTL has been filed, you lose. Sorry. Yours, Famspear

[David Merrill]

Yes of course. But there are hundreds of Readers less ignorant and much less biased.

Including the allusion by somebody above that the one office in the state is adaquate process...

emphasized in an Order to Show Cause:

…except that State law merely conforming to or reenacting Federal law establishing a national filing system does not constitute a second office for filing as designated by the laws of such State…

This is the trick legaleze that Prof espouses. This is why you all think that a lien can become real without process - simply a phone call from an IRS agent saying, without even certifying the accounting, "He owes us money."

http://www.law.cornell.edu/uniform/vol7.html#fedln



Regards,

David Merrill.



P.S.

Dear David Merrill: I'm not sure from your syntax if you understand what Prof wrote. What I was trying to get at -- and what Prof is also saying -- is that by law the Federal tax lien under 6321 is legally valid AGAINST THE TAXPAYER without the need to file a Notice of Federal Tax Lien (NFTL).

The purpose of issuing -- and filing -- the NFTL is simply to PERFECT the already existing lien as against THIRD PARTIES, LIKE OTHER PEOPLE TO WHOM THE TAXPAYER OWES MONEY, not against the taxpayer. The NFTL relates to PRIORITY as among your creditors. The lien against the taxpayer is legally valid against the taxpayer, even without an NFTL.

This means that when the IRS comes to seize your property to satisfy YOUR Federal tax liability, and you object on the ground that no NFTL has been filed, you lose. Sorry. Yours, Famspear

Only within the scope of private credit. What you describe is irrecusable obligation found in the 1984 article in my video.

http://friends-n-family-research.info/F ... cMoney.wmv

[The Observer]

This is the trick legaleze that Prof espouses. This is why you all think that a lien can become real without process - simply a phone call from an IRS agent saying, without even certifying the accounting, "He owes us money."

Regards,

David Merrill.

Really? Can you show us any evidence where an IRS agent created an assessment merely by calling someone and saying,"You owe us?"

[Famspear]

Dear David Merrill: The "scope of private credit"? "Irrecusable obligation"? Good grief. Has anyone explained the processes of creation and perfection of a Federal tax lien to you? -- Famspear

[silversopp]

Dear David Merrill: The "scope of private credit"? "Irrecusable obligation"? Good grief. Has anyone explained the processes of creation and perfection of a Federal tax lien to you? -- Famspear

I don't think there is much hope of explaining anything to a man who thinks that his motor scooter can sue Jesus Christ and King Arthur.

[Prof]

This is the trick legaleze that Prof espouses. This is why you all think that a lien can become real without process - simply a phone call from an IRS agent saying, without even certifying the accounting, "He owes us money."

Regards,

David Merrill.

Really? Can you show us any evidence where an IRS agent created an assessment merely by calling someone and saying,"You owe us?"

Observer:

Many statutory liens -- including the IRS tax lien -- are the result of someone taking non-judicial action based upon facts, not "legal decisions," and that action is the creation and perfection of a lien.

For example, if a clerk at the lumber store decides that a bill for lumber has not been paid, then that clerk can file an M & M lien against the house into which the lumber has been incorporated. M & M liens become effective against the owner's property only by filing (or, in the case of personal property, by possession -- which is why the transmission shop will not let you have the car back without getting paid). The decision that the bill is due and a lien should be filed, and the when, where and why of the lien, are all just clerical. Of course, if the clerk screws up, and files an M & M lien when the bill has been paid or out of spite or against the wrong house, there are civil actions that allow the recovery of damages.

The same analysis applies to the IRS or a state ad valorem taxing authority. If the clerk screws up, or acts out of spite, there are remedies.

The IRS lien, which is like an ad valorem lien on personal property, attaches without anything more. Of course, the revisions to the IRS lien statute make it clear that buyers take free, just as state law ad valorem personal property statutes allow buyers to take free of those liens. That does not change the liability of the of the debtor/taxpayer, of course. So, if the IRS tax lien or state ad valorem lien were to attach to inventory, and the inventory were to be liquidated under the safe harbors permitted by state or federal law, the lien would fail but the taxpayer would still have liability.

[David Merrill]

Dear David Merrill: The "scope of private credit"? "Irrecusable obligation"? Good grief. Has anyone explained the processes of creation and perfection of a Federal tax lien to you? -- Famspear

That is why I find the denial and dissociation from reality here so fascinating. You come up with all the hooplah about me being crazy, yet you fall for the same trap again and again.

By the by - within the scope of private credit the IRS agent has to get a certified accounting by form about the alleged debt, even in the scenario you are trapped within - what you are taught to believe.

I would bother finding the citations about that but I do not deal with people stuck thinking like you do. You can go ahead thinking I am insane; that suits me well for my work here.



Regards,

David Merrill.

[David Merrill]

Note the self-cancelling terms in Prof's blurt; that I have adopted into my Signature.

The filing of a tax lien...


Ergo 6323 - Place for filing...


You have to step back a little to get out of the projectile conditioning and spray but I am sure the vast majority of the Readers can catch it for a reality check.

I caught the Prof before (I recall when I mixed the blurt up to be from Wserra) in this same conundrum. He speaks of filing tax liens and will not respond with the fact that filing requires filing. Ergo 6323 and the flaw in your theories that an IRS agent thinking there is a debt creates any kind of enforceable lien.



Regards,

David Merrill.

[The Observer]

Observer:

Many statutory liens -- including the IRS tax lien -- are the result of someone taking non-judicial action based upon facts, not "legal decisions," and that action is the creation and perfection of a lien.

Prof, there is a reason that I phrased the question to David as I did. My question had nothing to do with the creation of the lien, but the creation of the assessment.

[Prof]

Observer:

Many statutory liens -- including the IRS tax lien -- are the result of someone taking non-judicial action based upon facts, not "legal decisions," and that action is the creation and perfection of a lien.

Prof, there is a reason that I phrased the question to David as I did. My question had nothing to do with the creation of the lien, but the creation of the assessment.

I understand (and understood). I further reply to your discussion, here is the statute creating the federal tax lien, which certainly arises against the assets of the delinquent taxpayer autotmatically if there is a debt and a demand, even if nothing is filed. Of course, there is no priority absent filing, but the lien/debt exists as to the taxpayer upon the deliquency and a demand to pay:

s 6321 Lien for taxes.


If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.

[David Merrill]

The more casual observer will see that it has to do with:

The only thing I'm seeing in your response, David, is that you don't know how to distinguish the effectiveness of a lien from its perfection.

And that is the Quatloser mentality in a nutshell. The effectiveness of a lien is that an IRS agent can usually, in a simple letter convince any employer to divert funds. When the employee protests, actually before the employee protests, the IRS agent is considerate enough to include a copy of the NFTL misfiled at the county clerk and recorder's office. This serves as evidence of the lien allegedly in place because the IRS agent says so.

I am well aware of the distinction between a lien being perfected and it being effective.

This circles around to my Signature quote from Prof. He has twice now spoken of filing a lien, perfecting it. But avoids any mention of the statutory system of doing so.



Regards,

David Merrill.

[grammarian44]

David, you just illustrated that in fact you don't know the difference between an effective lien and a perfected lien.

But I'm breaking a promise to myself not to try to engage in conversations with delusional individuals.

[The Observer]

This circles around to my Signature quote from Prof. He has twice now spoken of filing a lien, perfecting it. But avoids any mention of the statutory system of doing so.

He did mention a statutory system - its called IRC 6321

[Famspear]

Dear David Merrill: You say that the "effectiveness of a lien is that an IRS agent can usually, in a simple letter convince any employer to divert funds. When the employee protests, actually before the employee protests, the IRS agent is considerate enough to include a copy of the NFTL misfiled at the county clerk and recorder's office. This serves as evidence of the lien allegedly in place because the IRS agent says so."

You may be confusing the whole concept of creation and subsequent perfection of liens, on the one hand, with an administrative levy on the other. When you talk about an IRS agent sending a letter to convince an employer to divert funds (i.e., to divert funds to the IRS), you are talking about a levy. At that point, the employer does not really care whether the IRS has a valid lien. The employer also does not care whether the lien has been perfected as against third party creditors. This means that the employer does not need to see an NFTL. The IRS agent would not even need to send a copy of an NFTL to the employer. It wouldn't matter whether the NFTL, if issued were properly filed in the right place or not. What you are describing is not a case of competing debts owed by the taxpayer to the employer and the IRS. This means that the filing of an NFTL and the perfection of a tax lien under section 6323 is not material.

Confusing liens and levies is another common occurrence among tax protesters. Has anyone explained the basics of an administrative levy to you? -- Famspear

[Famspear]

Dear David Merrill: Post-script: Do you understand WHY the employer does not really care whether the IRS has a valid lien?

And do you also understand WHY the employer does not care whether an NFTL has been filed in the proper place, etc.?

Do you understand that alll the employer wants to do (usually) is get himself off the hook with the IRS? Can you cite the statute that puts that employer "on the hook'?

Do you understand why complying with the IRS demand is all the employer has to do to get that employer off the hook? --Famspear

[silversopp]

That is why David Van Pelt advocates becoming an unemployed bum. No employer for the IRS to get on the hook. It's a fool proof system.