NoSSN - UPDATES:* Another Response to the Internet Rumor Mill

October 24, 2000

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The Tax Freedom 101 Report
*Updates* - *News* - *Information*
The Constitutional Revival Movement's News Source
- October 24, 2000 -
This weekly HTML formatted e-newsletter contains:

* * * * * * * * * * * * * * * * * * * * * * * * * *

UPDATES:
* Another Response to the Internet Rumor Mill
* Test Your Knowledge with: The Constitutional Quiz Question of the Week!

NEWS:
* IRS Funded to Hire More

INFORMATION:
* A Tale of Two Cites
- Examining the Civil and Criminal Sides of the Tax Issue.

Dear Netizen: Do you find the material in The Tax Freedom 101 Report interesting, useful, educational, and enjoyable? You do? Great! Then why don't you recommend this newsletter to a friend or two. They don't have to be a crazed liberty-lovin "radical" like you and me - even raging communists and everyone in between enjoy reading our newsletter! So spread the word... the forward button is just a click away...

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UPDATES:
* Another Response to the Internet Rumor Mill

The Facts: Edward Kotmair's Trial and Conviction
By John B. Kotmair, Jr.
SAPF founder and fiduciary, and Ed Kotmair's father.

To all whom it may concern: We would rather keep my son’s business private, but because of circumstances beyond our control, the non-factual ludicrous reports posted on the Internet and otherwise rumored, we are now forced to set the record straight.

Right after the Justice Department’s “tax time” press release regarding Edward’s conviction, the Fellowship started receiving e-mails about postings on the Internet making ridiculous nonsensical statements about the facts of the case and the Fellowship’s participation. We also received letters from a few members inquiring about the allegations. (One of the members actually told us that our answer would determine whether he was going to renew his membership or not!) It was hard for us to believe that a member of the Fellowship could be so politically naive and ignorant about law, facts, procedure and the tyrannical conduct of the federal courts.

The most ridiculous of the allegations was: “How could the Fellowship help any Patriot if I can’t keep my own son out of jail?” A question such as this from a member can make one wonder “why bother?” But the alternative to not bothering is unthinkable.

FACTS ABOUT THE CASE

The federal grand jury in North Carolina did not bring an indictment against Edward but that did not stop the Assistant U.S. Attorney, David Cortes. In 1997 Cortes filed an Information against Edward for three counts of failure to file 26 USC § 7203 under the name of another attorney within the U.S. Attorney’s office. If my memory serves me, this filing of the Information was publicized about the time of the annual income tax "filing deadline," as they usually do.

At that time Edward was living in Maryland and was notified about it by acquaintances in North Carolina after it was published in the local news media. He did not run and hide, or alter his life style in any way.

A couple of weeks after it was announced that members of the Fellowship were embarking on establishing a talk show radio network, Liberty Works Radio Network, in April of 1998, Edward was picked up going into a convenience store by the same IRS Special Agent, Michael O’Hanlon, who was in charge of the raid on the Fellowship Headquarters and my home on December the 10th, 1993. During the drive to Baltimore, O’Hanlon asked Edward about the radio effort, and Edward answered by asking O’Hanlon if he had heard about “the shot that was heard ‘round the world.” O’Hanlon responded that he had and Edward told him that the LWRN programming would be heard as far away as Japan. At that time that was not exactly correct, but now through LWRN’s Internet site, we are heard around the world, and from time to time we receive correspondence proving that to be the case.

When the judge in the federal district court in Baltimore made it known that she planned to release Edward on his own recognizance, the local Assistant U.S. Attorney telephone conferenced Cortes into the Courtroom and he tried to convince the judge to intern Edward. When it appeared that he could not persuade her on the merits, he said to her, “Do you know who his father is?!?” She responded that it does not matter who his father is. To that he stated, “His father is John Kotmair!” She responded that had nothing to do with the proceedings at hand, and released Edward on his own recognizance.

To read the rest of the FACTS ABOUT THE CASE, click here.

* Test Your Knowledge with: The Constitutional Quiz Question of the Week!

This week's question: How was the disagreement about the chief executive [president], "selection process" compromised at the Philadelphia convention?

The answer to this question and many other intriguing and timely education material will be provided in the TAX FREEDOM 101 Alert Forum at:
http://groups.yahoo.com/group/TAXFREEDOM101

The Three Maxims for Tax Freedom!
Rule #1 - Protect Your Property and Earnings! Rule #2 - Get Educated! Rule #3 - Take Action!*
*Have you completed Rule # 1 first? Do you know how to properly protect your property and Income?
If you do know about asset protection and have not taken the steps to protect what is yours
what are you waiting for?! Learn about the "Three Maxims" for Tax Freedom here.

NEWS:
* IRS Funded to Hire More
Monday, October 16, 2000
IRS to Boost Staff Size for First Time in Six Years
From Reuters

WASHINGTON--The Internal Revenue Service, which collects more than $1.8 trillion in taxes each year, plans to begin expanding its staff for the first time in six years thanks to a budget breakthrough, Commissioner Charles Rossotti said.

In a memo to employees sent Friday and obtained by Reuters on Sunday, Rossotti said Congress funded the personnel growth in an $8.7 billion IRS budget approved last week, up $643 million from fiscal 2000, which ended Sept. 30.

The spending plan, which meets 99% of President Clinton's request, "represents a very significant turnaround for the IRS," he said.

For the first time in six years, it will permit the tax-collecting agency to start hiring both to replace retirees and other departures and to add the equivalent of 2,079 full-time staff, Rossotti said.

This would let the IRS fill "a substantial number of special agent, revenue agent and revenue officer positions" as well as add tax specialist and taxpayer resolution representatives and other employees called for in a new organizational structure, he said.

The IRS, the Treasury's largest agency, currently employs about 98,000 people.

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INFORMATION:
* A Tale of Two Cites"
- Examining the Civil and Criminal Sides of the Tax Issue.

The title of this article is "A Tale of Two Cites", and no I did not make a typo here. The word 'cite' is the word we will be focusing on with respect to the tax issue for both those citizens who file a return on their domestic earned income and those who don't file. The definition of the word 'cite' according to Webster's Ninth New Collegiate Dictionary is: 1. To call upon officially or authoritatively to appear (as before a court).

Wisdom and Experience A Degree Doth Not Make

What set up the writing of this article was the following comment left in our guest book from a student working on his Master in taxation.

[Begin Student's comments]: Your site (Tax Freedom 101) is very interesting and intriguing. I must make a comment however. I am completing a Masters' degree in taxation and I respond very negatively to your implications that attorneys and tax preparers do not know the tax code. This issue is very simple, do you know it? I am sure I and my colleagues in this practice understand the "Code" better than most Americans and probably you. I have put many long hours into studying the tax law and appreciate the knowledge I have of it. My question is simple, if the IRS DID impose a lien on your assets would you represent yourself, or get a tax attorney? You will probably get the more intelligent choice, the lawyer, if you can afford us! [end comment]

I then had to respond - else miss a golden opportunity to educate another sleeping citizen, or even worse one involved in a bad nightmare.

[Begin my response to the comments left in the guest book]: I'll start from the end of your comments and work backwards. First off it would be impossible for the IRS to lien any property that I "control" seeing as I don't own anything in my own name (by choice). So there would never be a civil matter to contend with, and if there were a lien and/or levy on certain property, no I would not petition tax court (an administrative court for Taxpayers, not an article III court) nor retain a tax attorney. Although I should say that we do have a large cadre of attorneys, CPA's, and other financial professionals who have taken our course, and have since asked to work with us.

I'm sure you have spent many-a-long night burning the midnight oil to understand the code, and I apologize if you take offense to our statements, but it has been our long experience that the universities do not teach the law. Maybe you should take our $10,000 challenge and prove us wrong. Prove the basis of the thesis incorrect and take the cash.

It is unfortunate that we have gotten off on thy wrong foot, but I understand your anger and frustration. You may be better off not investigating our material any further as it most likely will only upset you more. [end response]

The Civil Cite

Let's take a close look at the Civil issues first, as apparently this student fears we may soon learn about it ourselves through the lien or levy process. Let's be blunt here - the student is correct, although naively. This is where most ignorant filers and non-filers will lose against the IRS, on the side of civil matters. The reason most will lose [more to property] is because the filer or non-filer usually leaves their property unprotected. Leaving property unprotected means having "stuff" titled in your own name, like homes, cars, boats, etc. or leaving earnings in the hands of an ignorant third party such as an employer, brokerage firm, or an institution such as a bank. When left unprotected a litigious society or your friendly neighborhood revenue agents are more than happy to try and swipe it.

We do have many students working on expensive Masters degrees in the realm of taxation. Why? What is the need they are filling? Is the need they are filling to interpret the ever changing, seemingly complicated rules and regulations of the code, or perhaps to guide the public policy perceptions as often put forth in IRS publications and circulars which are not the law? Do the initials these students obtain following their names after graduation actually help those less learned understand the law? Apparently these initials help the public identify them as "experts". These "professionals" apparently have credentials in "interpreting" the law for the rest of us peons, and hence are able to advise us correctly in our personal and business dealings. The question is… from whose curriculum and agenda do these "Maters of Taxation" ascertain their degree?

The public's perception is that by retaining these high priests and tax gurus, it will in some way have a salutary effect in reducing the possibility of the big bad IRS coming down on them. That might hold true if students were actually taught the law as written and could discern public policy propaganda from actual documented fact.

Still Addressing Reality

On the civil side, property from innocent citizens is in most instances stolen by the IRS without due process of law. Meaning, without a judgment from a court of competent jurisdiction prescribing a lawful remedy after an action or suit has been decided. The IRS usually skips this inconvenient step. The IRS knows that very few judges are willing to sign an order allowing the IRS to take property from citizens when the dispute is over domestic income/wage and employment taxes. Too many judges in the past have stepped into suits over this very issue, and they just assume avoid the trouble. However judges also know that the IRS has no lawful authority to take property without a court order. But the IRS doesn't go to the court where the peoples' judge sits for court orders, do they? No, the IRS goes to their very own court, a.k.a. Tax Court. However the name is deceptive because Tax Court is not a court of law, but merely an administrative appeals board within the IRS.

Faulty administrative procedures and rubber stamped proceedings in Tax Court allows the IRS to move onto the collections process against delinquent Taxpayers. If a person believes he or she is a Taxpayer, they have the right to petition the "court", since Tax Court is for the "benefit" of Taxpayers. I'm sure a person can find many a tax "professional" with some of those nifty initials following their name to attend the ceremonial shearing and hold their hand at $150 to $200 an hour if they do wish to petition Tax Court.

The bottom line is if a person has determined that he or she is not a Taxpayer, they have no business petitioning the IRS' court for relief. However if the IRS makes the presumption that the person is a Taxpayer, it is often due to that person's prior submissions of signed affidavits in the form of 1040's or the like. The IRS will logically and consistently determine that the person is indeed a Taxpayer year after year based upon this sole fact alone. This is the reason why Taxpayers are mailed forms for filing on a yearly basis without their request, or even notices of request and demand if the IRS feels the opportune occasion should arise. The correspondence will continue until a person addresses the IRS with the written law asserting that he or she is in fact not a Taxpayer. This is best done by not filing frivolous returns often associated with tax protestor schemes.

According to section 5431.4 of the Internal Revenue Manual describes a "tax protestor" as someone who files a return and writes a protest on the return. Such individuals usually protest their legal obligation to file returns to pay taxes. (emphasis added)

In next week's issue of The Tax Freedom 101 Report we will be addressing one of these common and most infamous "tax protestor" games.

Reversing the Presumption

If a person decides he or she is not required to file a return and they do not file a return, that does not make them a "tax protester" according to the IRM. However the IRS may presume that the person is still a Taxpayer with requirements to make a return based upon prior actions of filing a return. If the IRS does continue to presume that the person is a Taxpayer and continues to send them correspondence, the person receiving such correspondence has a couple of choices. 1. They can notify the IRS that they were misled and therefore mistaken when the past tax forms were filed, and that they are not the Taxpayer as defined in the law, thus reversing the presumption (in some instances better handled prior to any IRS correspondence being sent to them) or 2, they can do nothing. Any IRS correspondence that they receive after the fact, which is not rebutted, may provide ammunition for a possible criminal case later. The most common charge is willful failure to file, a misdemeanor. This is why all IRS correspondence must be answered! If no response is sent, then under the law of presumption, any allegation contained therein is considered to be correct!

The Criminal Cite

This side of the fence, the "Criminal" side is where we experience our most success with fellowship members, because the IRS is reluctant to prosecute well-prepared Patriots. You can read the article "IRS Reluctant to Prosecute Well-Prepared Patriots" contained in the October 3rd issue of The Tax Freedom 101 Report here.

Here are some enlightening excerpts from the article: "IRS Reluctant to Prosecute Well-Prepared Patriots".

"It must be realized that the IRS has limited resources. They cannot afford to lose time and time again in the courts. Their strategy must be confined to attacking the weaklings of the herd, in much the same way as a hungry pack of wolves. Therefore, the intelligent patriot must confine his strategy to doing nothing that will make himself a likely target for "celebrity prosecution."

"In our experience the IRS is reluctant to go after anyone who has faithfully studied the written law; asserted his rights in accordance with the law; and knows enough about the federal rules of procedure. Since the best and brightest are not normally hired by the IRS, it is left with no choice but to pursue a strategy that will prevent their best "talent" from being exposed to public ridicule."

"Sound arguments by the best well-informed patriots normally don't reach the courts. They are too hot for the "talented" IRS attorneys. You'll find that the IRS doesn't want to discuss how miserably they've been doing lately when they have come up against a well-prepared patriot."

Tax evasion is the criminal charge we shall discuss. Tax evasion is the hiding or understating of income and is a crime for those who are required to file a return and who attempt to underreport or hide income. Yes there are actually persons according to the law who are required to file a return, and there are some who actually attempt to defeat the tax through evasion. That is why it is better to say that the income tax is mandatory, but very limited in its application and to whom it applies, therefore the income tax is not voluntary!

The question that arises is, if the IRS does move ahead with an action for one who does not file a return what will be the charge? It will be willful failure to file under 26 USC § 7203. However if the person has protected and exhausted all their administrative and due process rights showing that the IRS was mistaken in its presumptions that the person was required to file a return it is highly unlikely that the charges will ever be brought before the court for the simple reason that the IRS must now prove that he or she had a requirement and acted willfully. This is very difficult for the IRS to do if the person is a well-prepared patriot, and the accused has not not taken the route of doing something much worse, the likes of which can be established under 26 USC § 7201. This is the attempt to evade or defeat the tax, a common charge in tax protestor schemes - more on this in next week's issue of The Tax Freedom 101 Report.

So Is It Willful?

WILLFULLY means - Committed voluntarily and purposely, with the specific intent to do something; voluntarily and intentionally assisting or advising another to do something that the person knows disobeys or disregards the law. A person does not act "willfully" if the person acts as a result of a good faith misunderstanding of the requirements of the law.

Intent and motive should not be confused. Motive is what prompts a person to act, while intent refers to the state of mind with which the act is done.

So, if the acts constituting a crime were committed by someone voluntarily as an intentional violation of a known legal duty, that is, with specific intent to do something the law forbids, then the element of "willfulness" has been satisfied even though the person may have believed that his conduct was [religiously, politically or morally] required, or that ultimate good would result from such conduct.

On the other hand, if there's a reasonable doubt as to whether someone acted in good faith, sincerely believing himself to be exempt by the law [e.g. from the withholding of taxes for example], then he did not intentionally violate a known legal duty, that is, he did not act "willfully".

Conclusions

The Tale of the First Cite

The IRS and its attempts to procure property through the Civil side is rendered fruitless if property is fully protected. If you need help in this realm, email taxfree@taxfreedom101.com for ideas on how this can be accomplished. If property is not protected and plunder does ensue a person does have the option to take up the expensive costs of filing a case and then waiting extensive time periods for the court to hear their plea for justice as the plaintiff. Certainly they may hire a tax attorney if they wish. However there are very few lawyers who actually can present the right arguments to a court based upon the law, and like our faithful masters of taxation student reiterated earlier that will depend on: "if you can afford us!"

Beyond that if a person believes they will see justice prevail in civil matters based upon the written law when tax issues are involved, they will nearly every time be sadly mistaken. Please realize that when seeking a fair an equitable decision from an attorney in a black dress who gets his very paycheck from the very same institution involved in distributing the plunder, that there is no larger a conflict of interests in this matter than for a "judge".

The Tale of the Second Cite

Simple. The criminal side in large effect is not an issue if the person has resolve, understands the law, is willing to assert and defend his or her rights, and they have properly documented and exhausted all their administrative and due process rights "if" the matter is ever contended.

by Bryan Rusch - Financial Educator
Copyright 2000

Wishing you a tax-free day,
The Tax Freedom 101 Staff

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"I believe there are more instances of the abridgement of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations." - James Madison (1751-1863)

DISCLAIMER: The data on this website is the collaborative experience, contributions, and research of various websites, legal books, tax documents, researchers, associates, attorneys, CPA's, etc. and does not constitute legal advice. The primary purpose of this site is education. We do not advocate any specific course of action. What you do with this information and any course of action you decide to take, if any, is entirely your responsibility.

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