Taxes: Al Diamon gets it

Fruits of my labor
BY AL DIAMON
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Would you move your home or business to a state where property taxes are 53 percent higher than in Maine?Of course not. It’s common knowledge Maine’s property taxes are among the worst in the nation, so this other place would have to be tax hell.Except it isn’t. New Hampshire, arguably the state with the country’s lowest tax bite, has an average property-tax rate of $24.50 per $1000 of assessed valuation, compared to an average of just $16 in Maine. Of course, our Granite State neighbors pay no sales or income taxes, while we suffer with both.Nevertheless, our politicians continue to act as if the property tax were the principal cause of Maine being the most heavily taxed state in the Union. "There is no question that the forefront of all our agenda at this point is property-tax relief, property-tax relief, property-tax relief," Portland state Senator Ethan Strimling told the Portland Press Herald on January 5. One day earlier, Speaker of the House Patrick Colwell was quoted in the Lewiston Sun-Journal as saying, "If there’s any clear message that came out of [last November’s tax reform] referendum, it is that Maine voters want to see property-tax relief sent their way."Allow me to commit a little political heresy. Property taxes are not even close to being the biggest problem with Maine’s tax structure.The average property-tax bill in Massachusetts is eight percent higher than in the Pine Tree State. In a trendy suburb like Brookline, it’s 59 percent more than in Portland. In Providence, Rhode Island, the rate is 24 percent greater. And in Bridgeport, Connecticut, it’s 126 percent larger. While homeowners in boom towns throughout New England routinely get hit with tax rates in excess of $30, the levy on virtually all of fashionable Mount Desert Island is under $15.Nevertheless, Maine is awash in ill-considered schemes to reduce property taxes. Extremists like Carol Palesky’s Maine Taxpayers Action Network want a statewide cap on tax rates. State Representative Richard Woodbury of Yarmouth is trying to build support for capping property-tax bills at five percent of a homeowner’s income. Colwell wants to spend millions to double the homestead exemption for all property owners and increase eligibility for the circuit breaker program for low-income people.Good luck to all of them (well, maybe not Palesky’s band of kooks), but their efforts are misdirected. The real problem with Maine’s tax structure is the state income tax.If you earn a living in Maine sufficient to allow you to cling to a middle-class lifestyle, you pay about 29 percent more in state income taxes than the average US taxpayer. If you’re lucky enough to make $55,000 a year, Maine takes a bigger bite out of your paycheck than all but three other states. A family of four with a combined income of $100,000 pays $700 more in income taxes to Augusta each year than a Massachusetts family sends to Boston. If that Maine family moved to Rhode Island, they’d save $900. Connecticut’s rate is $1400 lower, Vermont charges $1800 less, and New Hampshire would allow them to keep it all.Only five states have a higher top rate on their income taxes than Maine’s 8.5 percent. Only one state, Oregon, assesses that highest charge on incomes lower than the $16,500 that puts a Maine wage slave in fat-cat territory. That’s right, people who work fulltime for minimum wage in this state pay 8.5 percent in taxes on part of their meager earnings.The income tax is "the greatest offender" in creating the state’s high tax burden, according to Betsy Chapman of the Maine Public Policy Institute, a conservative think tank. According to a recent study conducted for the institute by Dr. Richard Vedder, "the tax that was responsible for almost all the growth in tax burden over the past generation was the personal income tax." Vedder goes on to say that tax is "far more destructive of economic growth than other taxes, such as consumption levies, or even property taxes." That’s because, unlike sales and property taxes, the more you earn, the bigger the bite income taxes take out of each dollar.Maine’s income tax needs to be redesigned so middle-income families pay less — a lot less. It also wouldn’t do the state’s business climate any harm if the top rate, currently more than twice the highest bracket in Massachusetts, were reduced to something closer to the national average, thereby allowing most of us to keep more of what we earn.Of course, these changes would also significantly reduce the amount of money the state collects, necessitating either an increase in another tax (such as an expanded sales tax), a reduction in state spending (yeah, right), or some combination of the two.In an election year, that’s not going to happen. It’s far more likely you’ll move your home or business to a state with property taxes that are 53 percent higher than Maine’s. And an income tax that’s 100 percent lower.
If I’ve taxed your patience, email me at ishmaelia@gwi.net

Property taxes maybe higher in other states, but my guess is they're a smaller percentage of those folks income.Other than the cost of housing don't we pay more for the necessities of life? Electricity, auto license fees, telephone, are we traveling further to work, and spending more on transportation, heat for our homes?My point is when you combine the low wages, and the high cost of living Maine residents probably have less disposable income than anyone else in the nation. That would make writing the check to pay the property tax bill more painful.

quote:Originally posted by Doug Thomas:
That would make writing the check to pay the property tax bill more painful.

All those things make income taxes more painful as well.

No argument from me George. They both need to be reduced.I can't believe Maine's top income tax rate kicks in at such low wages without more complaining. You'd think we'd be storming the capitol with pitchforks.In order for any of that to happen spending will have to be reduced. Do we have enough Legislators with a stomach for that?

quote:Originally posted by Doug Thomas:
In order for any of that to happen spending will have to be reduced. Do we have enough Legislators with a stomach for that?

Not yet. Maybe after November.

If all withholding was stopped and everyone had to write a check quarterly for taxes. Maybe then all would know what they pay.Hopefully the surprising result would be a march to Augusta. Perhaps a Tea Party could be held.I am sure that those who are self employed know the pain of these payments.No I do not pay thi way. But I did figure out in the past what percentage was missing from the fruit of my labors.How many people in the country know that figure.
Not many, most consider take home their pay. I say it's all yours, the Government just takes what they want.

Hap...you reminded me of a column from the past:

quote: The Gipper Had It Right A long, long time ago, in a state very far away, Ronald Reagan was elected Governor. His State had an income tax, but it was not withheld from paychecks. You simply filed once a year and made your tax payment. The tax level was very low….not much more than an annoyance. Even so, writing out that check once a year got your attention.Well-intentioned (or was it fox like?) legislators decided it would be a good idea to adopt income tax withholding to make it “easier” on the taxpayer. Governor Reagan was dead set against it; he believed that paying taxes should be a conscious and “painful” act, and that writing a check once a year made it so. He reasoned that this was necessary to make the public aware of government expansionism, and to protect themselves from continuous, cunning tax increases.He was unable to deter the legislature, and his fears were all too quickly realized. California began a series of income tax increases, moving from the annoyance level to the punitive level. But not many noticed, because withholding changed at the approximate frequency of wage and salary increases, and a “few more dollars a week” got lost in the confusion of everyday life. California continued its dogged trek to oppressive taxation and suicidal state spending. (Have you read the news? They have a $35 billion deficit, a Governor who hired 25,000 state workers in his first term, and who is about to be recalled. And he hasn’t event tried to implement state run health care yet!! Baldacci supporters should take note.)In Maine, we use “boiling frogs” to describe the same phenomenon. If you drop frogs into boiling water, they instinctively jump out to save themselves. But if you put them in tepid water, they’ll get all comfy, and you can slowly sneak the temperature up on them. They get drowsy, just like you do in a nice warm spa, and by the time it’s hot enough to cook them, it’s too late. Their complacency does them in.For many Mainers, the three primary taxes are “boiling frog” taxes. If your property taxes are impounded, you expect an annual recomputation of your monthly tax payment. You’re used to a ten, fifteen, or maybe a thirty dollar a month increase, and dismiss it as “just life”. Unless you file estimated income taxes, changes to it are softened by withholding. But the sales tax is the unrivaled King at “boiling taxpayers.”That’s why legislators love generating new revenues with it. “Broadening the base”, increasing the rate, “exporting it” on meals and lodging, and local option taxes are some of the ideas being considered. It’s the perfect way to extract millions more from a complacent public all too willing to except tax increases as inevitable.How many of you know how much you pay in sales tax, and how much the state collects each year? Pennies here, a quarter there, how much could it be? And what’s taxed and what isn’t? Why worry about it; there’s nothing you can do, right? This is why lawmakers love the sales tax. You don’t know how much you pay overall, and the payments are untraceable, except for the occasional major purchase. How warm is that water, Kermit? Aren’t you getting sleepy?According to state figures, we pay over $600 per capita a year in sales taxes. Maine collects roughly $800 million a year in sales tax. That’s more than the entire state budget less than 20 years ago! If there’s two in your house, do you remember spending $1200 plus? If there’s four of you, do you remember spending the $2400 plus? Maybe you remember a car purchase, but other than that, you gave it all up without so much as a whimper. What if you had to send that check in once a year?This is why John Richardson and his colleagues talk about raising another $600-800 million a year in sales tax “revenues” for the big spenders. You'll never notice another $500-$700 per capita. We make it so easy for them. We jump into tepid water willingly, hoping for a relaxing soak. To make the water more attractive, they’ll say they’re just “modernizing the system” by “broadening the base.” They may even lower the rate by 1/8 % so they can brag they “lowered taxes.”So that $5000 in uncovered dental work my wife just had costs me a couple hundred dollars more. And that $2500 you just spent in lawyers’ fees to fend off a frivolous legal action costs an additional $125. Do you have any choice but to pay it? And who will rail against taxes on funerals at a time of such emotional distraction?

So go ahead. Keep electing those who want to “reform” the tax system to make it “fairer.” Praise those who increase spending and use cunning to separate you from your earnings. And when they put a sales tax on your home purchase (there’s an easy $6500 or more on a typical home sale!), don’t come running to me. After all, you’re the one who willingly jumped into the pot of lukewarm water. And tell Miss Piggy I said hi if you see her before you’re cooked.

quote:
Allow me to commit a little political heresy. Property taxes are not even close to being the biggest problem with Maine’s tax structure.

The one and only problem in our tax system is that we pay more in total in relation to our meager income than anyone else. When this is coupled with our utter inability to actually ever spend less or even simply the same...well.What makes the property tax so odious is it's ability to tax based on imaginary wealth regardless of ability to pay, its tendency to cause the loss of an ancestral home only to satisify governmental greed, and the habit of stealing the entire value of the home when the tax bill owed is far less. All these are odious to most of the public and are only beloved by politicians and government.So, Al has it right but offers nothing as a solution. The only solution that will efect the overall economy is massive, draconian cuts in spending, something the pols will never, ever do.
;)

quote:Originally posted by hap:
If all withholding was stopped and everyone had to write a check quarterly for taxes. Maybe then all would know what they pay.Hopefully the surprising result would be a march to Augusta. Perhaps a Tea Party could be held.

I second that. Drop the income tax, jack the property tax and have the owner pay taxes quarterly. Residents might think twice before approving another bond, or reelecting the knuckleheads that can't stop spending. You want to see people really start to play a role in their government? Ban the withholding tax.

The only tax I am not against is a sales tax.It's a use tax don't use it don't pay it.However NO medical expenditures should ever be Taxed. Also normal unprepared food, that is a necessity.I was upset when the snack tax went away. I'm reminded everytime I pay tax on a bottle of water.
Also a sales tax is paid by all who visit.I have a vision of my Utopia. Maybe I'll post it one day.But we do have to work our way off the credit card Government. It will take time but it can be done. If only the will was there.We need a Dave Ramsey type in power.

quote: EVERYONE AGREES...The current Federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach.
It's time for the FairTax.
A SIMPLER WAY...Simply put, the FairTax replaces the way we're currently taxed - based on our annual income - with a tax on goods and services. The FairTax is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.
It's simple.Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free. The Federal government is fully funded, including Social Security and Medicare, and you don't need an expert to determine your Federal taxes.
It's simple.

Americans for Fair Taxation petitionNeither Senators Snowe or Collins have committed either way. I urge everyone I know to email them both.

Whats the problem with obeying the tax laws now as put forward in Mr. Larken's letter to AG John Ashcroft? Dick T.July 4, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I am not writing to you to ask for your thoughts or your assistance. I am writing to tell you this: you are at best a beneficiary of, and at worst a participant in, the biggest financial fraud in history, and I am pledging myself to tear down that fraud by any means necessary and to hold personally accountable everyone who has been shown the truth but has chosen to ignore it. The fraud will fall, and all those who ally themselves with the liars and thieves will fall with it.
I am not interested in receiving any of the government’s asinine form letters on the subject. Having spent several years navigating the labyrinth of “legalese” concocted by the government lawyers, I know the truth, as demonstrated by the enclosed video, Theft By Deception. When several million other victims of this fraud also know the truth, when they realize what their financial situations would have been had they not been illegally robbed of thousands of dollars every year, there will be hell to pay for this monumental deception and extortion scheme.
There is nothing you or anyone else can do to stop the storm that is coming. The truth will always outlive the lie. The choice before you is whether to go down in flames with the lie or to stand tall with the truth. I fear that, like most people who have had a taste of power, you will betray the American people whom you are supposed to serve, and will choose your own destruction in your desperate attempt to maintain your power.
The misrepresentation and misapplication of the federal income tax laws constitutes the largest financial fraud in history. I am not speaking of a loophole, or an accident, or some imperfection in the law. This was fraud and deception by design, including a concerted effort to cover up the truth. To show justification for such a statement, I will make plain to you (and the American people) my personal experiences with the lawless, Gestapo-like tactics of agents of the federal government, and their efforts to protect their multi-trillion-dollar lie.
The Law
The federal income tax statutes and regulations themselves conclusively prove the following:
1) There are specific sections of law (primarily 26 USC § 861(b) and 26 CFR § 1.861-8) which explain in what situations domestic income (income from sources inside the United States) is taxable (see 26 CFR §§ 1.861-1, 1.861-8(a), 1.863-1(c)). For decades, those sections have shown that the domestic income of U.S. citizens living and working exclusively within the 50 states is not subject to the tax, and that only those engaged in certain types of international or foreign commerce (commerce under federal jurisdiction) receive income subject to the tax (26 CFR §§ 1.861-8(a)(1), 1.861-8(a)(4), 1.861-8(f)(1)). Larken Rose (7/4/02): Page 2 of 11
2) Similarly, the items of income listed in the general definition of “gross income” (26 USC § 61), such as “compensation” and “interest,” are not always taxable, but are instead sometimes excluded for federal income tax purposes (26 CFR § 1.861-8(b)(1)). The regulations (26 CFR § 1.861-8T(d)(2)(iii)) give a specific list of those situations in which such items are not exempt (i.e., when they are taxable). Again, that list includes only activities related to international commerce.
Contrary to the “conventional wisdom” spread by tax professionals and government officials, the law itself conclusively proves that most Americans do not receive income subject to the federal income tax, and do not owe federal income taxes.
The regulations specifically proving each of the above points have been provided, in person and in writing, to numerous IRS employees. In addition, hundreds of citizens across the country have asked their congressmen and the IRS to confirm or deny the above points, and have included copies of the pertinent regulations (see enclosure).
The Response
The government’s response to perfectly reasonable questions about their own laws has been nothing short of tyrannical, reflecting an attitude more suited to Nazi Germany than to the United States of America. Here are a few examples:
1) More than one hundred Americans across the country have participated in “Operation Honest Inquiry” (see [url=http://www.taxableincome.net),]www.taxableincome.net),[/url] by sending to their congressmen and the IRS three specific, obviously relevant questions concerning the above-mentioned points. Most requests were ignored, and the remainder were responded to, not with actual answers, but with form letters discussing completely irrelevant issues, accusing the citizens of being law-breakers, and threatening them with fines and/or imprisonment, all in response to the citizens simply asking questions. Many of the citizens did not know the correct answers, but nonetheless were accused by the IRS of arguing something “frivolous” (when they were not arguing anything at all), and were plainly told that the IRS refused to discuss the issue further. (This in spite of the fact that the IRS Mission Statement includes helping citizens “understand” what the tax laws require of them.) When a government refuses to discuss its own laws and threatens people just for asking questions about what the government’s own law books say in plain English, it is insane to pretend that that government cares about “due process.” (A copy of the questions and exhibits of “Operation Honest Inquiry” are enclosed.)
2) While citizens across the country are simply pointing to what the IRS’ own regulations say in black and white, the IRS lawyers try to confuse the public with “guilt by association” tactics, by mischaracterizing the issue as “tax protestor rhetoric.” (There have been many flawed theories about why the income tax is invalid, which have been spread by individuals who did not understand what the law itself says.) The government lawyers try to avoid having to address the specifics of the issue by dishonestly portraying the issue as
Larken Rose (7/4/02): Page 3 of 11
some sort of protest about the law, and by making the asinine claim that the issue described above is “frivolous,” “baseless,” and not even worthy of discussion. To the frustration of thousands who now know the truth, government officials continue to try to portray them as law-breakers; illegal tax protestors who just do not want to pay their taxes, despite the fact that those individuals are determining their taxable income exactly the way the income tax regulations say they should (26 CFR §§ 1.861-1, 1.861-8). One viewing of the enclosed video will conclusively prove that the accusation, obfuscation and slander tactics by the IRS-the attempts to brush off this issue as some sort of “protest” of the law-are nothing more than despicable attempts by liars to cover up their lies.
3) I have attended several meetings between citizens and the IRS (concerning my own cases and as a witness in others’ cases). In every one, the citizen clearly laid out his position in writing prior to the meeting and in person at the meeting, politely showing numerous specific citations supporting each point in his position (similar to those described above). The citizen would then ask the IRS personnel to state on which points they disagreed. To date I have not heard one IRS employee explain the specifics of his own position or to say on which specific points he disagrees. For example, when asked whether they agreed that 26 USC § 861(b) and 26 CFR § 1.861-8 should be used to determine one’s taxable domestic income, the IRS employees in my case could not decide whether they agreed or not. (The problem for them is that if they agree, they are one step away from admitting that the income of most Americans is not taxable, and if they disagree, they would be directly contradicting their own regulations.) And IRS employees are equally unable to state their position on the other points.
It makes a mockery of “due process” and the administration of law for the enforcers to be unable to figure out what their own position is, much less support their position with actual citations of law. Yet those same IRS employees continue to threaten and extort citizens, without ever deciding what their own position is. That is not “law enforcement”; that is extortion and theft, and it has no place in this country. (The actions of the IRS make King George look like the poster boy for openness, honesty, and due process.)
4) It is somewhat understandable that low-level IRS bureaucrats would be unable to address such legal questions. (That, of course, does not absolve them of the responsibility of complying with their own regulations once they are shown those regulations.) There is a procedure called “technical advice” (26 CFR § 601.105(b)(5)) by which a citizen can request that the IRS lawyers at the National Office address a legal question. Contrary to the regulations and published IRS procedures, however, the IRS lawyers have specifically (illegally) instructed the bureaucrats not to refer this issue to them. They are content to let the low-level paper-pushers misinterpret and misapply the law, while the lawyers conveniently keep their distance, in order to insulate themselves from personal culpability. Such actions are the actions of liars and thieves, not the actions of “public servants.”
5) As if to give legitimacy to its open disregard for its own regulations, the IRS has issued various form letters and notices (which, according to the Internal Revenue Manual, do not carry any legal weight (IRM § 4.10.7.2.4.1)) that carefully avoid the specifics of the issue
Larken Rose (7/4/02): Page 4 of 11
while giving a fine example of “lawyerspeak,” stating half-truths which, read one way, imply something untrue. These non-binding notices serve as a valuable disinformation and propaganda tool for the IRS, since the average citizen assumes that a formal letter on IRS letterhead is legally binding, when that is not the case at all. (The regulations state the truth, but the individual IRS employees and their non-binding form letters contradict and confuse the truth. The IRS’ official position, as expressed in the regulations, is entirely correct; it is the position of individual IRS employees that is incorrect.)
6) In a move that can only be described as Kafkaesque, IRS employees routinely refuse to discuss what their own law books say. They baselessly assert that the issue is “frivolous” and refuse to discuss it and refuse to even give the specifics of their own position. (The article posted at www.taxableincome.net/articles/frivolous.html shows just how idiotic it is to try to dismiss the issue out of hand as being “frivolous.”) This totalitarian tactic has been implemented by the Tax Court as well. In one case (Williams v. Commissioner) the Tax Court grossly misrepresented a district court ruling (Crain v. Commissioner), saying “Petitioner’s arguments are reminiscent of tax protestor rhetoric that has been universally rejected by this and other courts. We shall not painstakingly address the petitioner’s assertions with somber reasoning, as to do so might suggest that the arguments have some colorable merit to them.” That quote, however, comes from a case that had nothing at all to do with the above-mentioned issue, but that did not stop the Tax Court from dishonestly citing it as their excuse for refusing to address the substance of the issue. Those familiar with the issue recognize this tactic for what it is: fascist garbage.
7) Even the IRS Chief Counsel’s office, acting as if it is the keeper of some “secret law,” has openly refused to answer specific, obviously relevant questions about determining taxable income. One well-educated individual (Tom Clayton, M.D.), having received the “cookie cutter” evasions and obfuscations from IRS Chief Counsel, persisted in asking the specific questions. Finally, IRS Chief Counsel sent him a letter stating that, having sent out their non-responsive form letters, they had provided “all the general information [they] have on this topic.” In other words, tap dances and evasions were all they would ever give; they refused to answer the specific questions.
8) Those at the IRS who process tax returns are specifically instructed to illegally “lose” returns that mention the issue described above. One revenue agent admitted to my face (9/22/00, Jenkintown, Pa.) that at the IRS Service Center, “If they see anything like that, they’re not supposed to process it... they’re taught not to process it.” This tactic is used by the IRS to circumvent the legal way to process returns, which requires the IRS to provide meetings if the individual wishes to discuss the issue (26 CFR § 601.105). I am personally aware of dozens of cases in which the IRS openly refused to grant meetings to discuss the matter, even after being shown the specific citations that require it. (One return that I filed myself was “lost” by the IRS three separate times. For another return, I had to send in requests for three years before I was granted my first meeting.) Most people are never afforded due process meetings; their “inconvenient” returns are simply discarded as if they were never filed, without even a hint of due process being provided. Larken Rose (7/4/02): Page 5 of 11
9) In addition to “losing” such returns, the IRS also routinely attempts to impose a $500 “frivolous return penalty” (26 USC § 6702) on those who file returns citing the above issue, despite the fact that the returns mention only what the regulations themselves say. To step up efforts to terrorize people out of filing returns that tell the truth, and to instead force them into “complying” with the IRS’ gross misapplication of the law, Congress is even now trying to raise the penalty to $5,000 and to give the Secretary of the Treasury unilateral permission to declare any issue to be “frivolous” and therefore subject to the penalty. (Welcome to the land of the free, where citing the law is now a crime.)
Amazingly enough, on more than one occasion I have personally seen the IRS refuse to process certain returns, saying they were never received, while at the same time trying to impose a penalty on the returns they say they never received! This despicable intimidation tactic is compounded by the fact that the IRS sends out a form letter that blatantly lies about an individual’s procedural rights. The form letter says the individual must pay the penalty before appealing it, while the regulations (26 CFR § 601.106(a)(1)(iv)) and the Internal Revenue Manual (IRM § 8.11.1.7) clearly show this to be untrue. Attempting to dismiss a return as “frivolous” when the return includes specific citations supporting every point of the position, makes a joke of due process. And fining people for filing such returns is nothing more than criminal thievery, but it is standard practice at the IRS.
10) In two cases I am personally aware of (at two different IRS offices), after the low-level IRS personnel were shown that their actions were unquestionably contrary to the law, the regulations, and published IRS procedures, the IRS personnel responded by saying that IRS District Counsel had sanctioned their actions, and that they therefore refused to do anything differently. Apparently, IRS personnel believe that IRS lawyers have the power to singlehandedly negate statutes, regulations and procedures merely by instructing their underlings to ignore them. This “just-following-orders” excuse (á la Nuremberg) is compounded by the fact that, assuming the IRS lawyers really did instruct their underlings to blatantly disregard the law, they did not do so on the record, so they too escape responsibility for their lawless actions.
11) The various alleged “checks and balances” in the system are nothing more than a thinly veiled disguise for a unified, tyrannical gang. Getting stonewalled, lied to, threatened, and robbed at two different offices (e.g. Examinations and Appeals) does not constitute “due process”; it constitutes double oppression. The Appeals Division of the IRS, which pretends to have the job of objectively reviewing decisions made by IRS Examinations and making decisions in an impartial manner, is in reality nothing more than a rerun of the evasion and extortion tactics of the Examinations employees.
12) The next level of so-called “appeal” is petitioning Tax Court (which is actually a glorified administration hearing) for a redetermination of a liability alleged by the IRS. In reality, this is nothing more than a “mock trial,” again run by those who have no concern for due process, the law or the truth, but whose single concern is the preservation of their own power and reputation. The Tax Court pseudo-judges (usually former IRS agents) simply echo the provably false and baseless claims of the lower bureaucrats, making accusations
Larken Rose (7/4/02): Page 6 of 11
that the position is “frivolous” and fining people thousands of dollars simply for daring to cite the law itself in that kangaroo court. The “court” continues the lawless pattern of refusing to address the specifics and refusing to say on which specifics it disagrees. Being robbed by three thieves in a row does not constitute “due process.” (Though the Internal Revenue Manual clearly states that Tax Court rulings are not binding precedent (IRM § 4.10.7.2.9.8(3)), the IRS cites them as if they constitute a legal authority, while at the same time ignoring the clear wording of the regulations, which are binding on all IRS personnel (see IRM § 4.10.7.2.3.4).
13) Both the “Taxpayer Advocate” and the office of the Treasury Inspector General for Tax Administration (TIGTA) have also proven themselves to be nothing more than additional henchmen for this extortion racket. While they sometimes assist “compliant” extortion victims with various trivialities, both offices routinely turn a blind eye to all the glaring abuses and misconduct by IRS personnel when directed at those who dare to raise the above-mentioned issue. Apparently, “due process” applies only to those who still mistakenly believe that they owe the IRS a significant portion of their paycheck. Meanwhile, the federal thieves can get away with whatever lawless tactics they want to use against those who do not “comply” with the IRS’ misapplication of the law.
14) In a truly outrageous move, the IRS lawyers recently declared that citizens will be forbidden from audio-recording or having any formal record of meetings with the Appeals division of the IRS, and forbidden from even bringing witnesses with them. Not only is this a clear violation of 26 USC § 7521, but it also flies in the face of the most basic principles of due process. Hearings done “off the record” are worthless, as IRS employees, when “off the record,” routinely lie about citizens’ rights, attempt to bully and intimidate them, refuse to address any “inconvenient” issues (such as the subject of this letter), etc. To put the label of “due process” on such closed-door hearings is absurd. Particularly in light of the refusal by Appeals to even allow witnesses to accompany the citizen, such meetings are not about affording “due process”; they are about intimidating, bullying, terrorizing, and extorting citizens in secret. They are the mark of a fascist regime, not a constitutional republic.
15) The IRS functions in every way like an extortion racket. I have personally seen several instances in which IRS employees admitted that they could not answer questions about how to properly determine taxable domestic income, but instead resorted to outright thievery, trying to levy or seize the property of the citizen, bypassing numerous procedural requirements, and ignoring entirely the concept of due process. In the middle of one meeting (9/22/00, Jenkintown, Pa.), at which the agents obviously could not explain away their own regulations, one agent wanted to talk about “the kind of money they’re messing around with,” as if how much they intended to steal had some bearing on what the law says is taxable. At another meeting (4/3/00, Sarasota, Fla.), after being shown the specific regulations about how to determine taxable domestic income, the IRS manager responded with “And we... we also have other sections, so we’re not gonna get into this. If you refuse to cooperate with us...” (They, of course, would not produce
Larken Rose (7/4/02): Page 7 of 11
those “other sections,” despite repeated requests that they do so.) To IRS employees, “cooperation” does not mean complying with the law; it means blindly obeying whatever the IRS bureaucrat tells you to do, regardless of the law. The IRS routinely responds to attempts to discuss what the law says by making threats about how they will take the person’s property. That is theft, racketeering, and extortion, as well as blackmail, since the threats often take the form of “here is how much we will take from you if you don’t sign a return swearing that your income is taxable.” (Incidentally, this in itself is a crime under 26 USC § 7206, as it is an attempt to coerce someone into signing a return he believes to be inaccurate.)
16) In the ultimate act of censorship and cover-up, the IRS and the Department of Justice have begun to silence those who publicly discuss the limited nature of the income tax. Under the flimsy guise of trying to stop an “abusive tax shelter,” the government began attempts to get a court injunction to silence me and shut down my Web site (taxableincome.net). In my case, those efforts were so patently absurd that the DOJ has apparently since abandoned its attempts to censor me. However, after repeatedly refusing to have an honest discussion about the law, after failing to come up with a substantive response or even describing the specifics of their own position, government agents have now successfully silenced several individuals, using court injunctions against alleged “abusive tax shelters,” despite the fact that the law they are pretending to apply would not apply at all to what those individuals were doing, even if they had been wrong about their conclusions of law (see 26 USC § 6700). This harassment and censorship “under color of law” is yet another example of the totalitarian attitude of the architects of this deception.
17) To my knowledge, no one has ever been criminally convicted for relying on the above issue. Nonetheless, requests by citizens to have an honest, open discussion of the law are often responded to by the IRS with threats of prosecution and imprisonment. The IRS form letters threaten nasty consequences of not obeying the tax laws, while at the same time openly refusing to address perfectly reasonable questions about what the law actually requires. There are indications that the IRS and the DOJ are now considering attempts to prosecute individuals who have relied entirely on what the government’s own law books say in plain English. These individuals have repeatedly and publicly requested that the government provide any citations which might refute their position and explain any errors they may be making. Again, the government terrorists refuse to discuss the matter, and instead are considering attempts to imprison people for daring to comply with what the law actually says, instead of complying with the lawless demands of bureaucrats.
If the power-happy bureaucrats at the IRS and DOJ want someone to prosecute, by all means send them my way. If those totalitarian thugs want someone to charge with a crime, give them my address and tell them to take their best shot.
Blatant disregard of procedures and regulations by the IRS is not the exception; it is the rule. The IRS has engaged in stonewalling, lying and cheating, in every single case I am aware of. Those attempting to preserve the fraud are clearly orchestrating an attempt to systematically destroy any chance of citizens receiving due process relating to this issue. They refuse to give Larken Rose (7/4/02): Page 8 of 11
Examination meetings, insist that citizens attend Appeals meetings alone and off the record, fine people for mentioning the law in Tax Court, and make a complete joke of every other “due process” procedure.
Both the Internal Revenue Service and the Tax Division of the Department of Justice have acted, not as law enforcers, but as extortionists, bullies, thieves, terrorists, and censors, seeking to punish those who dare to rely on what the government’s own law books say. Many in government will lose a lot of wealth and power when this fraud collapses, so the federal thugs desperately continue to escalate their terrorism and robbery of the American people. Meanwhile, Congress has stood by and knowingly allowed these oppressions, intentionally looking the other way. As is always the case with tyrants, the politicians obviously care far less about the truth than they care about their own power. The “system” has no interest in the truth or in anything that endangers its power.
This fraud will end, not because there is anyone truthful or honorable in Congress, or in the IRS, or in the Department of Justice, but because an informed populace will force an end to it. When that happens, those who have actively worked to preserve this fraud will regret their decisions. I believe the tyrannical actions of the government in this matter would in many instances justify violent resistance, and after several million victims of this fraud know the truth, the masterminds and preservers of this fraud will deserve whatever the enraged victims of this fraud can dish out.
As for myself, I wish to see this end without bloodshed, and hope that those implementing this injustice will admit the truth and change their behavior before forcible resistance becomes unavoidable. Unfortunately, if history is any indication of what to expect, those in power will continue to refuse to have an open, honest discussion, will refuse to provide due process, will refuse to admit the truth, and will continue to escalate their efforts to terrorize and intimidate the American people into submitting to the IRS’ gross misapplication of the law. I shudder to contemplate the inevitable results if that is what happens.
The Situation
I personally have corresponded with hundreds of Americans who are afraid to obey the law. They know they do not owe federal income taxes; they know they receive no “taxable income,” but they make payments anyway, for fear of what the IRS will do to them if they do not. They knowingly file false returns, incorrectly reporting their income as taxable, because they are afraid to tell the truth. Decent human beings would be ashamed to hold power in a regime responsible for such a situation.
For those who know the truth and have chosen to act on it, the IRS and the DOJ have responded using methods that can only be described as Gestapo tactics, consisting entirely of threats, harassment, intimidation, and outright theft. These actions are an abomination against civilization and an affront to all this country is supposed to be based on. Like all cowardly, power-happy bullies, the IRS and DOJ employees terrorizing the citizenry are completely incapable of a rational discussion of the law and the evidence; they avoid it like the plague. The only language they understand is the language of threats and violence. They are, to beLarken Rose (7/4/02): Page 9 of 11
blunt, lawless thugs. They find security in their “pack” and in the knowledge that they have their superiors’ permission to ignore procedures, break the law, and terrorize the public. Like the Nazis, they believe they can escape personal responsibility simply because they are “just following orders” given to them by their power-happy, god-complex bosses.
In addition to the average citizens who are afraid to obey the law, more and more federal employees and tax professionals are realizing that the “conventional wisdom” about the federal income tax is grossly incorrect, but they too fear to say so publicly, for fear of retaliation from the federal storm troopers. The government propaganda and misinformation machine, assisted by the incompetent or intentionally disingenuous “reporting” of people like David Cay Johnston at the New York Times, goes to great length to vilify, ridicule and terrorize any who dare to publicly speak the truth, including former government officials such as former IRS Special Agent Joseph Banister.
Using the same methods of the regimes of Mao and Stalin, certain federal officials target would-be “whistle-blowers” for character assassination, vilification and other harassment. At least a dozen CPAs and attorneys have told me that they personally dare not tell their clients that the income of most Americans is not taxable-though they know that to be case-for fear of possible retaliation by the federal leviathan. Their fear is based on experience, because they see what is done to tax professionals who dare to correctly apply the laws: they are publicly ridiculed and insulted, threatened, fined, harassed, and silenced and put out of business by way of court injunctions (again under the asinine claim that telling people what the law says constitutes an “abusive tax shelter” subject to 26 USC § 6700).
When average citizens begin to look into the issue and the reactions of the government, they are often stunned and terrified by what they see. This does not match what they were told about a government “by the people and for the people”; it does not match the government’s rhetoric about “taxpayer services” or concern for due process; it instead matches the attitudes and tactics of every totalitarian regime in history. As more Americans get introduced to this situation, I get more and more notes from people expressing their utter disgust and absolute shock at the actions of “their” government. They see government agents lying, cheating, and stealing. The citizens who begin to see what is going on are at a loss for what to do, since every level of the “system” is engaged in the same evasions and intimidations.
The people have been taught that the system will grant justice, and that petitioning the “system” and playing by the system’s rules is the only civilized remedy for such problems. When they see the reality of the situation, it scares the hell out of them, because they realize, at least when it comes to dealing with the IRS, that they are not living in the country of Jefferson and Washington; they are living in the country of Lenin and Stalin. They see honest, law-abiding people begging the government to address the issue, to explain the law, to show where the citizen might be in error, to show legal support for the government’s actions, and to hold hearings where the written law can be openly and honestly discussed. But as was the case hundreds of years ago, their humble petitions “have been answered only by repeated injury” (the Declaration of Independence). On this Independence Day we have come full circle, just as the Founders of this country feared. The government can no longer be said to be a servant of the people; it is the primary violator of individual rights; it is the enemy of freedom, not the protector of it. It is high time the victims of IRS tyranny put an end to it. Larken Rose (7/4/02): Page 10 of 11
On too many occasions I have seen hard-working, decent, law-abiding Americans literally reduced to tears by the systematic harassment, robbery and intimidation that the IRS intentionally inflicts on any who do not unquestioningly bow to the commands of whatever mentally unstable bureaucrat has his case file. The pattern clearly shows that many IRS bullies cause citizens emotional stress on purpose, cause marital strife on purpose, cause financial destruction on purpose, cause constant worry and feelings of insecurity on purpose, and delight in the emotional and financial collapse of their victims. While of course not all IRS employees, or even a majority, are like this, such sadistic animals are not at all uncommon in the IRS, as they are perfectly suited to the extortionist, terrorist organization that the IRS was designed to be. (After all, you cannot illegally steal trillions of dollars from the citizenry unless you keep the people constantly terrified of the “collectors.”)
The Remedy
This situation is intolerable. This ongoing terror campaign and extortion racket run by agents of the United States government has to end, and I intend to see to it that it does. The means necessary to achieve justice will depend upon the lengths to which the guardians of this deception will go to preserve it. As thousands of Americans have begun to learn the truth, the participants in this fraud have resorted to more and more despicable tactics, slandering, threatening, harassing, robbing and censoring those who dare to publicly speak the truth. When tyrants and thieves can no longer preserve their power through propaganda, they will fall back on what they know best: coercion and violence.
“Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them, and these will continue till they have resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they suppress.” - Frederick Douglass
Too often in history the only remedy to government injustice has been forcible resistance by the people. Those who wield power eventually become accustomed to dominating others using threats and punishments, and “forget” how to act like human beings, using discussion and reason. This tendency is all too clear in the current actions of the IRS and the Tax Division of the Department of Justice. They think and act like gangsters and thieves. They do not know how to discuss; they know only how to threaten and punish. (All this from employees of the government, whose job it is to protect the citizenry from such fraud and theft.)
Most IRS employees truly believe they are just enforcing the law. They too are victims of the disinformation campaign of the government lawyers. However, once federal employees have been formally provided with actual citations of law showing their error, if they continue to participate in the federal shakedown, they lose the ability to plead ignorance. They become no better than the average lawless thug on the street and do not deserve to be treated any differently. In addition to educating the general public about this injustice, I am also showing the administrators of the law the truth about how they have been unwittingly used to illegally defraud their own friends and neighbors. (I have already sent out dozens of free copies of the Theft By Deception video to IRS employees across the country, and will continue to do so.) Larken Rose (7/4/02): Page 11 of 11
Again, I want to see this fraud brought down without violence, but I have no intention of bowing to thieves and criminals simply because higher-ranking thieves and criminals have given their blessing (via court rulings or IRS lawyer directives) to the illegal looting and plundering of the American people. Over and over again the truth has been made plain, and over and over again the federal miscreants have ignored the law and tried to browbeat and subdue citizens into surrendering money that the citizens knew they did not owe. Every level of the bureaucracy, including Congress itself, has either turned a blind eye or given its blessing to such harassment and extortion. (When trillions of dollars are at stake, those in power forget who is supposed to be the master and who is the servant.)
I will not willingly allow myself and my family to be robbed, no matter how many government officials endorse the robbery. I will resist. I will not willingly allow my neighbors to be deceived and extorted, whether or not they themselves see what is happening. I will resist. I will not willingly allow those who tell the truth to be terrorized, robbed and imprisoned. I will resist. Though the majority of the people remain deceived, I will resist. Though the perpetrators of this swindle have tremendous wealth and power, I will resist. Though I am only one person with only one voice, I will resist. I will resist to the day I die, or to the day this injustice dies. And I am not alone.
Sincerely,
Larken Rose
www.Theft-By-Deception.com
P.O. Box 653
Huntingdon Valley, PA 19006
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If we have a Supreme court that can change "congress shall make no law" into "congress shall make a law", why do you believe you have a case? The law does not mean what it says. It means what some bureaucrat says it means when some pet judge agrees. We live in a time where the clear wording of a law means less than the whim of the court and the caprice of government.You stand no chance. :eek:

It's been my observation that the only thing Al Diamon "gets" is inebriated.