WHO DOES AND WHO DOESN'T GET PROSECUTED FOR TAX CRIMES, A MANUAL FROM THE TAXMAN's DRAWER at the IRS
Is the Government Letting High-Profile Tax Protesters Slide So that It
Can Ensnare Smaller Ones?
QUESTION: I've have watched the prosecution of Tax Honesty proponents
now for nine years. While there are the rare exceptions, prosecution
for tax (or tax related) offenses falls in a series of easily discernable categories.
1) HELLO CARIBBEAN! People who move money into off-shore bank accounts in the belief that
simply moving it out of the country somehow diminishes or eradicates any legitimate tax liability,
or with the belief that one need not argue with the IRS if the IRS can't get at your money.
2) OH YOU BAD BOY! People who commit some other act (besides not paying income tax)
which casts their integrity into doubt in the minds of a jury. Examples:
a) Lynne Meredith withstood 6 years of investigation only be finally3) DRIVING WHILE RICH. People who tell others that they do or do not have federal income tax liability. Leona Helmsley comes to mind "Our set doesn't pay taxes," she told servant.
undone by her own use of several false Tax Ident. Numbers.
b) Another gentleman (whose name eludes me as I write this) gave a
lender (which was undoubtedly insured by an agency of the US government)
a false set of tax returns for a home loan. They were false not in that
they shows incorrect earnings, but because he had not actually filed any
returns for the year in question, because he truly believed that he had no liability.
c) The former owner of CPA used several different aliases to engage in
activities the government felt were done with the intent of "defeating
the revenue laws".
4) NOBODY PERSON OF INFLUENCE- Non-licensed people who complete tax returns for others, or tell
others how to fill out tax returns, or are thought to have a substantial influence on how others complete their returns.
5) Licensees who fail to file returns on income from the licensed activity. [More common at the state level.]
They should go after Senator Feinstein's contractor HUSBAND and his billionbuck state BIDS!( CALIFORNIA CORRUPT, http://www.luckinlove.com/califcorrupt.htm
6) People who fail to understand that the administrative forum is the
"entry level court" and that a judicial court has limited authority in
reviewing the actions of the agency. People without this understanding
often bury themselves administratively and then falsely believe that
they can "get the facts out" before a court. This group commonly
includes people who use federal tax numbers on tax forms such as forms
W-4 and W-9, which are signed under penalty of perjury, and then claim
they have no tax liability when questioned by the Service.
If one stays away from these 6 actions, one has virtually no chance of being prosecuted by the government for any tax crime. Of course civil injunctions are something altogether different than being prosecuted for a criminal offense. I personally believe that most purveyors of Tax Honesty services make a mistake that permits the government to seek an injunction. They do not clarify (before the fact) that their clients are non-taxpayers. Every filing for an injunction speaks of the affect of the defendant's actions upon "taxpayers". The government has a legitimate interest in not allowing people to lead taxpayers astray. Whenever I work with a person, I get a signed statement from them that they have already determined that they are a non-taxpayer and they acknowledge that I do not work with taxpayers. In that way the Treasury Department has no grounds to assert jurisdiction concerning my actions.
The article Liberty posted suggests that the Internal Revenue Service
and the Department of Justice may have sinister intent. The article
suggests that people such as Irwin Schiff are left alone so greater
numbers can be prosecuted.
On the other hand, there have been several high profile cases. The
Pilot Connection serves as an example. When finally the government
prosecution machinery began rolling, most people even close to Pilot
Connection leaders went down. In the last couple of years the Anderson
Ark group serves as another example. Several movers and shakers were
prosecuted for that particular program and several more have recently
It took a while, but IRS/DOJ took after high profile folks who used
Thurston Bell strategy to apply for and in some cases secure refunds.
David Bosset and several others have been subjected to civil actions,
including injunctions, for well over a year there has been a concerted
effort to indict Dick Simkanin, and the California Franchise Tax Board
went after Nick Jessen. None of those people fall into the "little fish"
Although it doesn't always seem that way, the government has limited
investigation and prosecution resources. Those resources must be
allocated in the context of efficiency and effect. Thus you wind up with
"little fish" and "high profile" cases. Since the object is successful
prosecution, that also has something to do with who is and who isn't
prosecuted. They darned sure don't like to lose.
Larry Becraft can speak to this matter. On numerous occasions the
Department of Justice and federal judges have attempted to prevent him
from defending clients in various jurisdictions. If someone appears to
be vulnerable because he has limited defense capabilities or cannot
afford effective counsel, he gets pitched into the grist mill. If he
made blunders that a jury can easily condemn, prosecution usually isn't
any big deal. Also, I believe "little fish" are frequently used for
prosecution test runs. Government prosecutors probe vulnerabilities and
learn how to best attack any given scheme or position by prosecuting
If I recall correctly, Schiff spent two terms in federal prison for
tax-related offenses. Bill Benson spent one term. I wasn't prosecuted
for a tax-related offense, but I went down the river once. And the story
goes on. There is such a thing as "the guy who won't quit," and as he is
seasoned by the system he may be increasingly difficult to prosecute.
I believe that may be a factor in determining why some of the high
profile cases the government singled out in the last two or three years
haven't gone to trial. Knowledge of income tax law and particularly of
procedure has dramatically increased in the last few years so
prosecution isn't always as easy as it was in the past. I didn't see the
original article written by MacPherson but I can probably guess some of
the high profile cases he named that haven't been prosecuted. Several
people in this group have worked in the background on some of the cases.
Because of the contributions original prosecution intent hasn't come to
fruition in the public forum. There is considerably more to legal
process than simply raiding and/or arresting someone one day then
staging a trial the next. Rarely do legal battles in the trenches make
There is also a fine line between freedom of speech, press, etc., and
intentional criminal acts. Proving intent where people act in good faith
is also problematic. Where tax issues are concerned, being wrong isn't a
crime. That can make prosecution extremely difficult. That probably
contributes to government mentality that follows the line of "do the
easy ones twice."
Everyone in this group will probably agree that the federal income tax
scheme is a fraud. I assure you that there are numerous people inside
government who know more about the fraud than we do. For example, last
summer when I visited via telephone with the General Accounting Office
attorney who provided me with the Public Law cites that vest authority
in the Director of the Office and Management and Budget for settling
accounts of the United States, I asked a blunt question: "Is there any
delegation of authority whatever for the Internal Revenue Service to
collect delinquent tax debts from the general population?"
We were in agreement -- none whatever.
If she knows the truth, ranking officials in the Department of the
Treasury, the Internal Revenue Service and the Department of Justice
also know the truth. Consequently, they have two critical strategic
problems: (1) How do they use selective prosecution to maintain the
general terror factor, and (2) how do they avoid losses that expose the
fraud? Every time they take after someone who has knowledge of critical
fraud elements, the political risk factor is calculated into the prosecution formula.
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