EVERY WHICH WAY BUT LOOSE

Intro

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Since August of 2003, when the revelations of CtC were first published, the IRS has been engaged in a desperate struggle to regain its hold of fear and confusion over those now equipped with an understanding of the long-hidden secrets of the "income" tax, and to stop that understanding from spreading.  We have seen, for instance:

• two revampings of the Form 4852 during that time-- both attempting to obscure the scope of that form's proper use;

• a carefully inaccurate allusion to a typical CtC-educated filing sit as #1 on the IRS "Dirty Dozen" list for a year (then quietly get relocated to #5 and then #7 as CtC-educated filings merely increased, and continued to prevail, making the misdirection of the listing too obvious for the agency's comfort);

• Mis-directional ploys such as the "Questionnaire" discussed here;

• a multitude of constantly tweaked agency "FAQ" and "Truth About Frivolous Argument" publications seeking to instill doubts about what is taught about the law in CtC in the minds of careless readers, worthy of attention only in order to enjoy the agency's entertaining efforts to imply what it cannot simply declare, but wishes a naive reader to take from the reading.

We have also seen a series of transformations in the means by which the occasional loose-cannon IRS staffer attempts to persuade a CtC-educated filer to stand down.

For a while, fairly brazen declarations that a filing meets the statutory definition of a "frivolous return" was the popular approach.  Brazen or not, of course, these notices were always mere exercises in intimidation, which careful analysis readily revealed to be fallacious.

Everyone must come to his or her own conclusions, but consider: The notices strive hard to give the impression that the tax agency can unilaterally disregard the target's filing, and can tack on a penalty as well.  BUT they say that the agency will generously refrain from imposing the penalty, if only the target withdraws the original filed testimony and replaces it with what the agency wants attested-to (which, remember, the target is simultaneously being told would be legally meaningless, because the agency can unilaterally disregard that original testimony at will...).

What is being implied is that, either way, the amount of tax owed is going to end up being whatever the agency dictates-- the filer's return notwithstanding.  The only optional element is the additional penalty, which the agency is offering to forego out of the goodness of its heart.

Well, if this is true..., WHY SEND THIS "LETTER" AT ALL?  If the agency has the power to unilaterally make these decisions, there is absolutely no point to asking the target to do anything!

If the agency (or its client) has the power it is suggesting, its correspondent would simply get a notice along the following lines: "Dear Mr. XXX: We have calculated your tax liability for 200X, and converted $XXX of your withheld property in escrow to our ownership.  An invoice for the outstanding balance [if any] is attached.  Your filed return was frivolous, and provided us with the authority to add a $XXX penalty to your tax liability.  We have [added or foregone] this penalty." 

After all, if the agency has the unilateral authority it is attempting to suggest that it does, why would it care whether another return was filed?  (Readers of 'Cracking the Code...' will know the answer to that, of course.)

Instead, the agency DOES make this "threatening" request; and/or "proposes" calculated liabilities to which it asks its target's agreement in order to have effect (see examples of this here).  Sometimes it begins sending endless "levy notices" to the unbending filer (which notices, insofar as they concern years when only accurate, educated returns have been filed, only allege liability for a penalty, and not for any tax related to the year in question-- even when the target has received a complete refund of every penny withheld or paid-in in connection with that year...).  The sum of all of this is, of course, that the agency DOESN'T have the unilateral authority which it suggests that it does, and where accurate, educated filings are concerned, its "frivolous letters" are just exactly that: frivolous letters.

Bothke v. Terry, 713 F. 2d 1405, at 1414 (1983)

Nonetheless, as more and more warriors have forcefully pointed out to more and more IRS workers that inappropriately sending such threatening-looking letters cuts very close to the criminal under a variety of federal and state laws, the tax agency has scrambled to adjust.  For one thing, the "frivolous" notices have been carefully and repeatedly modified toward ever-more obvious legal meaninglessness, in order to deflect potential charges of constructive fraud, witness tampering, extortion, etc.

At the same time, these legally dicey threatening-sounding notices have been largely replaced by a comical kind of delay tactic, in which the agency sits on a filing in silence, and when contacted with an inquiry to the effect of "Where the h*ll is my property?!", responds with a claim that the agency can't find the filer's return and a request that the offended filer please send a fresh copy, or a series of "We need 45 days to look into the matter-- please be patient-- don't call us, we'll call you..." notices.

In this series of articles, we take a close look at many of these gimmicks, ploys and dodges in order to accurately perceive their true character, and take in and appreciate the underlying message, which is that efforts like these are engaged in only when the actor has  no real basis for its actions.

Enjoy.

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EVERY WHICH WAY BUT LOOSE- XXXVII

CtC Warrior J. has made quick work of a bogus IRS effort to chivvy him back into the eyes-down, cud-chewing, barn-bound herd.  In October of 2007, J. had filed his CtC-educated return for 2006, rebutting a couple of erroneous ascriptions of "income" to him by folks who had paid him during the year, and making his formal declaration of "income" received for the year-- which happened to be $0.  See the filing here.

Not quite a year later, the tax agency decided to deliver a little "customer service". It popped the following into the mail to J.:

Needless to say, Warrior J., who takes his responsibilities as an American as seriously as our Founders did, wasn't interested in being an IRS "customer", and didn't see any of this as "service", at least not the kind of "service" he was going to tolerate:

The IRS, which is now verrrry familiar with this kind of response, and understands that those who send it aren't backing down and aren't going to be fooled again, quickly folded its tent and went to look for a non-CtC-educated person to bother instead:

One can only hope that those non-CtC-educated folks out there will wake up and start helping good patriots like J. get the out-of-control, law defying federal government back into harness where it belongs.  If they don't, we're just going to have to watch in sorrow while the harness is tightened on these folks instead, and the whip-cracking begins in earnest...