1099OID Alert

[Nikki]

The Sooeys will be disappointed.

The IRS has identified a tax scheme involving the filing of Form 1099-OID or bogus Treasury instruments accompanied by a Form 56 (Notice Concerning Fiduciary Relationship). Form 56 is used to name an individual as a fiduciary or personal representative of the taxpayer. Commonly used names in this scheme include Secretary of the Treasury Henry Paulson and IRS Commissioner Douglas Shulman,

This scheme has evolved from the old argument that the government has created a “straw man,” or artificial representative, for each United States citizen and that there is some type of an account at the Treasury Department for this straw man. Individuals are attempting to use this “account” to pay debts and claim false withholding credits.

How the scheme works: The taxpayer completes Forms 1099-OID naming their creditors as “recipients” on the Form1099-OID. The amount of the debt is also included on the form as withholding. Often the Form 1099-OID is accompanied by Form 1096, Annual Summary and Transmittal of U.S. Information Returns. If processed, the amount listed as withholding is then input as a credit to the taxpayer’s account. A Form 1040 is then filed claiming a refund.

Documents received that include the names and addresses of government officials on Forms 1099 or Form 56 should not be processed but forwarded intact (tax return, F56, and information documents) to the Centralized Frivolous Return Program:

IRS
Frivolous Return Program
1973 N. Rulon White Blvd.
Mail Stop 4390
Ogden, UT 84404

[Kimokeo]

Is this somewhere on the IRS.gov website?

[Quixote]

How the scheme works: The taxpayer completes Forms 1099-OID naming their creditors as “recipients” on the Form1099-OID. The amount of the debt is also included on the form as withholding. Often the Form 1099-OID is accompanied by Form 1096, Annual Summary and Transmittal of U.S. Information Returns. If processed, the amount listed as withholding is then input as a credit to the taxpayer’s account. A Form 1040 is then filed claiming a refund.

That makes no sense. If the creditor is listed as the recipient of the OID, then the bogus withholding credit would belong to the creditor, not the TP.

[wserra]

That makes no sense. If the creditor is listed as the recipient of the OID, then the bogus withholding credit would belong to the creditor, not the TP.

Four months later they started another operation which they called "The Other Operation".

[ASITStands]

This is precisely the remedy being used by Sam Kennedy, and others.

In the now-closed thread, we discussed a recent e-mail in which he said:

I must regretfully bring you news which may be viewed unfavorably by some. A new technology that has taken the patriot movement by storm is, sadly, fatally flawed. Upon close scrutiny, an incurable defect was found hidden in plain sight.

Wonder if that's the "Other Operation?" Or, were you just being facetious?

And, remember, Kennedy reputedly said the technique didn't work for Elaine Brown because she used capital letters when describing "1099-oid." More evidence of the "Other Operation?"

This same remedy may also be what's being considered by 'PatriotGames.'