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    INCOME TAX: Do We Realy Have to Pay It?
    INCOME TAX: Do We Realy Have to Pay It?
    INCOME TAX: Do We Realy Have to Pay It?
    Ebook143 pages2 hours

    INCOME TAX: Do We Realy Have to Pay It?

    By Edwin H. Sinclair, Jr.

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    About this ebook

    The Tax Code is more than 15,000 pages, so it's understandable that people turn to experts, to help them pay their taxes, or to help avoid paying them.

    The purpose of this book is to explain almost every one of the most popular non-payment arguments presented to Federal Courts, the controlling laws, plus cases and relevant cases, with decisions/conclusions

    LanguageEnglish
    PublisherMagic Lamp Press
    Release dateFeb 1, 2010
    ISBN9781452306513
    INCOME TAX: Do We Realy Have to Pay It?
    Author

    Edwin H. Sinclair, Jr.

    Edwin H. Sinclair, Jr. has been a successful businessman, attorney, and real estate investor for more than thirty years, and has offered financial and investing advice to numerous social and business contacts. Other books he has written can be seen at his publisher's website www.MagicLampPress.com

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      Book preview

      INCOME TAX - Edwin H. Sinclair, Jr.

      INTRODUCTION

      It’s unlikely that anyone really enjoys paying income tax every year, but some people dislike it so much that they’ve become part of movements that have attracted numerous monikers: tax resisters, tax protesters, tax evaders, untaxers, patriots, sovereign state citizens, etc., etc.

      Understandably, the IRS isn’t too happy with these people, and the constant battle between the two sides often resembles a Roadrunner cartoon.

      Dropping out of the legitimate portion of society and working under the table strictly for cash isn’t the type of thing an average person can easily do, so the only way to keep earning a living and fervently try to avoid paying income tax must depend on a belief that there actually is a valid way to avoid paying income tax.

      The Tax Code is more than 15,000 pages, so it’s understandable that people turn to ‘experts,’ both to help them pay their taxes, or to help them avoid paying them.

      The former include CPA’s enrolled agents, H & R Block, and legitimate tax preparers who do their best to help you keep as much of your earnings as possible, without going afoul of the law.

      The other kind of experts don’t think they’re breaking the law either... they just interpret it a little differently, like various religions all interpret the Good Book... and these beliefs take the form of arguments that are made to the authorities who attempt to enforce the Tax Code, and include everything from claiming things like a Slavery Exemption, to contentions that wages are not income, the Constitution doesn’t demand that they pay taxes, filing a tax return is voluntary, and enough other protestations that this entire book barely covers them all... but the IRS documentation contained does a pretty good job of coming close.

      One of the most well-known tax protesters is a man named Irwin Schiff, and his name is mentioned so many time in this book, with reference to cases he was involved in, that we feel something should be said about him in advance.

      He came to prominence in 1983, when on a national television broadcast he said, If anybody calls this show and cites a section of the code that says an individual is required to file a tax return, I’ll pay them one hundred thousand dollars.

      An attorney named John Newman saw the show and a day later wrote a letter to the television network in which he cited the pertinent code sections... and he wanted to collect the reward.

      Not surprisingly, Schiff refused to pay up, and being a lawyer, Newman sued him to collect.

      The case went to court and Newman lost – not because he wasn’t correct in his citing of the code sections, but because Schiff s made the condition that someone must call this show, and the court ruled that writing a letter did not qualify for the reward.

      This brought more fame to Schiff, and on subsequent broadcasts he dispensed more plans on how to avoid paying income taxes, and went on to write several best-selling books on the subject.

      As you read this book, you will learn how Schiff and his disciples have fared, relying on his tax-avoidance strategies.

      NOTE: Many times in this book, a reference is made to cert being denied. That word is an accepted abbreviated form of the word Certiorari, which in the context used means that the Supreme has either granted cert or denied cert, and the case has been certified to be heard by the high court (or denied).

      If you see the same case being mentioned over and over again, each time it is cited, it refers to different pages of the court opinion that refer to the particular issue that was important at the time of the court action.

      The editors at Magic Lamp Press

      *****

      From the IRS:

      THE TRUTH ABOUT FRIVOLOUS TAX ARGUMENTS

      NOVEMBER 30, 2007

      TABLE OF CONTENTS

      I.

      FRIVOLOUS TAX ARGUMENTS IN GENERAL

      A

      The Voluntary Nature of the Federal Income Tax System

      Contention: The filing of a tax return is voluntary

      Contention: Payment of tax is voluntary.

      Contention: Taxpayers can reduce their federal income tax liability by filing a zero return.

      Contention: The IRS must prepare federal tax returns for a person who fails to file.

      Contention: Compliance with an administrative summons issued by the IRS is voluntary.

      B

      The Meaning of Income: Taxable Income and Gross Income

      Contention: Wages, tips, and other compensation received for personal services are not income.

      Contention: Only foreignsource income is taxable.

      Contention: Federal Reserve Notes are not income.

      C

      The Meaning of Certain Terms Used in the Internal Revenue Code

      Contention: Taxpayer is not a citizen of the United States, thus not subject to the federal income tax laws.

      Contention: The United States consists only of the District of Columbia, federal territories, and federal enclaves

      Contention: Taxpayer is not a person as defined by the Internal Revenue Code, thus is not subject to the federal income tax laws.

      Contention: The only employees subject to federal income tax are employees of the federal government.

      D

      Constitutional Amendment Claims

      1. Contention: Taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment.

      2. Contention: Federal income taxes constitute a taking of property without due process of law, violating the Fifth Amendment.

      3. Contention: Taxpayers do not have to file returns or provide financial information because of the protection against selfincrimination found in the Fifth Amendment.

      4. Contention: Compelled compliance with the federal income tax laws is a form of servitude in violation of the Thirteenth Amendment.

      5. Contention: The Sixteenth Amendment to the United States Constitution was not properly ratified, thus the federal income tax laws are unconstitutional.

      See website at http://www.thelawthatneverwas.com/new/ home.asp for more background info on 16th Amendment

      6. Contention: The Sixteenth Amendment does not authorize a direct nonapportioned federal income tax on United States citizens.

      E

      Fictional Legal Bases

      Contention: The Internal Revenue Service is not an agency of the United States.

      Contention: Taxpayers are not required to file a federal income tax return, because the instructions and regulations associated with the Form 1040 do not display an OMB control number as required by the Paperwork Reduction Act.

      Contention: African Americans can claim a special tax credit as reparations for slavery and other oppressive treatment.

      Contention: Taxpayers are entitled to a refund of the Social Security taxes paid over their lifetime.

      Contention: An untaxing package or trust provides a way of legally and permanently avoiding the obligation to file federal income tax returns and pay federal income taxes.

      Contention: A corporation sole can be established and used for the purpose of avoiding federal income taxes.

      II.

      FRIVOLOUS ARGUMENTS IN COLLECTION DUE PROCESS CASES

      A

      Invalidity of the Assessment

      Contention: A tax assessment is invalid because the taxpayer did not get a copy of the Form 23C, the Form 23C was not personally signed by the Secretary of the Treasury, or Form 23C is not a valid record of assessment.

      Contention: A tax assessment is invalid because the assessment was made from a substitute for return prepared pursuant to section 6020(b), which is not a valid return.

      B

      Invalidity of the Statutory Notice of Deficiency

      Contention: A statutory notice of deficiency is invalid because it was not signed by the Secretary of the Treasury or by someone with delegated authority.

      Contention: A statutory notice of deficiency is invalid because the taxpayer did not file an income tax return.

      C

      Invalidity of Notice of Federal Tax Lien

      Contention: A notice of federal tax lien is invalid because it is unsigned or not signed by the Secretary of the Treasury, or because it was filed by someone without delegated authority.

      Contention: The form or content of a notice of federal tax lien is controlled by or subject to a state or local law, and a notice of federal tax lien that does not comply in form or content with a state or local law is invalid.

      D

      Invalidity of Collection Due Process Notice

      Contention: A collection due process notice (Letter 1058, LT11 or Letter 3172) is invalid because it is not signed by the Secretary or his delegate.

      Contention: A collection due process notice is invalid because no certificate of assessment is attached.

      E

      Verification Given as Required by I.R.C. § 6330(c)(1)

      1. Contention: Verification requires the production of certain documents.

      F

      Invalidity of Statutory Notice and Demand

      Contention: No notice and demand, as required by I.R.C. § 6303, was ever received by taxpayer.

      Contention: A notice and demand is invalid because it is not signed, it is not on the correct form (such as Form 17), or because no certificate of assessment is attached.

      G

      Tax Court Authority

      1. Contention: The Tax Court does not have the authority to decide legal issues.

      H

      Challenges to the Authority of IRS Employees

      Contention: Revenue Officers are not authorized to seize property in satisfaction of unpaid taxes.

      Contention: IRS employees lack credentials. For example, they have no pocket commission or the wrong color identification badge.

      I

      Use of Unauthorized Representatives

      Contention: Taxpayers are entitled to be represented at hearings, such as collection due process hearings, and in court, by persons without valid powers of attorney.

      J

      No Authorization under IRC § 7401 to Bring Action

      Contention: The Secretary has not authorized an action for the collection of taxes and penalties or the Attorney General has not directed an action be commenced for the collection of taxes and penalties.

      III.

      PENALTIES FOR PURSUING FRIVOLOUS TAX ARGUMENTS

      This document is in response to some of the more common frivolous legal arguments made by individuals and groups who oppose compliance with the federal tax laws.

      The first section groups these arguments under six general categories with variations within each category. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention.

      The second section responds to some of the more common frivolous arguments made in collection due process cases brought pursuant to sections 6320 or 6330. These arguments are grouped under ten general categories and contain a brief description of each contention followed by a discussion of the correct legal authority.

      A final section explains the penalties that the courts may impose on those who pursue tax cases on frivolous grounds. It should be noted that the cases cited as relevant legal authority are illustrative and are not intended to provide an allinclusive list relating to frivolous tax arguments.

      [Author’s note]:

      The Tax Haven: Income tax laws can be quite different from country to country, so some people choose to ‘forum shop’ to find the most favorable place for their own particular tax needs.

      One popular haven is the Cayman Islands, which does not place any tax on the income of nonresidents.

      This is difficult for individuals, but often is popular for large corporations, because they

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