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LewRockwell.com

anti-stateanti-warpro-market

Cracking the Code

James Ostrowski

After my recent posts about tax protesters who lose in court, I received several emails advising that there is a new and improved version of tax protesting set forth in the book,

Cracking the Code

So I checked to see how the book had faired in court cases

There are two reported cases

In both cases, the court issued an injunction against tax preparers who apparently used the book’s theories to prepare tax returns

Here’s some excerpts:

United States of America v. Beverly J. Hill and Darrell J. Hill,

No. CV-05-877-PHX-DGC,

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA,

2005 U.S. Dist. LEXIS 38086;

97 A.F.T.R.2d (RIA) 548

December 22, 2005, Decided

The Court further concludes that an injunction prohibiting only violations [*15] of

IRC §§ 6694

and

6695

would not be sufficient to prevent Defendants’ interference with the proper administration of the IRC

Defendants continue to hold the erroneous belief that wages are not taxable income under the IRC and that Plaintiff is thus

imposing against them unconstitutional taxation

Doc # 170 Cal. 631, 151 P 1;

see Docs. ## 112 at 2, 152-53

(Defs.Affs.)

In fact, in April 2005 — after Plaintiff filed this lawsuit — Defendant Darrell Hill filed forms with the IRS in an attempt to reduce to zero dollars the amount of wages previously reported to the IRS by five of his former employers

Doc. # 18 Ex. I

(IRS Form 4852,

Substitute for W-2,

Wage and Tax Statement)

2 Such frivolous filings have impeded the ability of the IRS to administer tax laws and has placed significant administrative and financial burdens on the IRS

Doc. # 121 PP 15-16

2 It appears that Defendant discovered this new practice from the book by Peter Hendrickson,

Cracking the Code:

The Fascinating Truth About Taxation in America

Docs. ## 18-19 Exs. F

Defendants included the book with their answers and have avowed their belief in the book’s interpretation of the IRC

Docs. ## 12 P 4, 13 P 4, 18-19 Exs. E

UNITED STATES OF AMERICA v. DONALD A. GRAY,

File No. 1:07-CV-42,

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MICHIGAN,

SOUTHERN DIVISION,

2007 U.S. Dist. LEXIS 19833;

99 A.F.T.R.2d (RIA) 1695,

March 19, 2007, Decided

Mr. Gray resides in Portage, MI

The United States alleges that Mr. Gray has been fraudulently preparing federal income tax returns since 2004

At the hearing Mr. Gray admitted that he prepares two types of tax returns

Mr. Gray stated that he prepares conventional federal income tax returns and he prepares federal income tax returns based on the book

Cracking the Code:

The Fascinating Truth about Taxation in America

by Peter Eric Hendrickson

Mr. Gray referred to tax returns based on Mr. Hendrickson’s book as either

cracking the code re-turns

or

zero-based returns

The premise of a

cracking the code return,”

as acknowledge by Mr. Gray at the hearing, is that

income

is not defined in the I.R.C. and wages earned by non-federal employees are not subject to the federal income tax

******

Mr. Gray has asserted that:

(i) that his customers had no income and

(ii) that his customers’ wages are not tax-able income

The position that his customers had no in-come or [*7] that his customers’ wages were not taxable are variations of the argument that the I.R.C. does not define

income

and that wages are not

income

Both of these arguments have been clearly rejected by the courts

E.g.,

Perkins v. Commissioner,

746 F.2d, 1187, 1188

(6th Cir. 1984)

(referring to such arguments about

income

as being

totally without merit”)

The Court finds that Mr. Gray was asserting a position that did not have a realistic possibility of being sustained on the merits

7:06 pm on February 28, 2008
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http://www.lewrockwell.com/lrc-blog/cracking-the-code/
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http://www.wikipediaint.wordpress.com/2014/08/21/wikipedia-and-wiki-wikipediaint-when-it-comes-to-the-internal-revenue-service-irs/
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