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Income Tax Myths

Income is Taxable Only if Connected to a Federal Privilege

(The “Cracking the Code” theory)
——————————————————————
Some protestors argue that income is taxable only if it is connected to a federal

privilege

Under this theory, income derived from being a federal employee, a federal contractor, or something like that would be taxable, but other income would not

The normal income of most Americans, particularly the wages of a private employee working for a private company in one of the 50 states, would not be taxable

A prime purveyor of this theory is

Peter Hendrickson,

who used it in his

tax protestor

book,

Cracking the Code
_____________________________________________

——————————————————————
http://www.losthorizons.com/Cracking_the_Code.htm
——————————————————————
Hendrickson asserts
_____________________________________________
The revenue laws are a code or system in regulation of tax assessment and collection

They relate to taxpayers, and not to nontaxpayers

The latter are without their scope

United States Court of Claims

Economy Plumbing and Heating v. United States

470 F.2d 585, at 589 

(1972)
_____________________________________________
QUESTION: WHY WOULD YOU CITE A STATEMENT ABOUTNONTAXPAYERS,” BUT THEN FILE FOR A REFUND LIKE ATAXPAYER?
——————————————————————
http://losthorizons.com/CtCforFree.pdf
——————————————————————
that for tax purposes, the term

income

has a

narrow legal meaning[]

exclusively involving,

and applying to,

certain privileged activities,

such as

holding

or

administering

a government office,

or

working in one
——————————————————————
Refutation
——————————————————————
It’s easy to disprove the

privilege

theory

You need only look at one of the most basic sections of the tax code, Section 61

Section 61
_____________________________________
Income Tax Myths

Theres just no law requiring you to pay federal income taxes
——————————————————————
The most basic myth of tax protestors is that there is simply no law mandating the payment of income taxes

Tax protestors frequently say

if only someone would show me the law that says that I have to file a tax return and pay taxes, Id be happy to do it

OK, here are the laws that

(a) impose an income tax on you,

(b) require you to file an income tax return,

and

(c) require you to pay taxes:

§ 1

The federal tax laws are contained in the Internal Revenue Code, which was passed by the United States Congress

The Internal Revenue Code is also known as Title 26 of the United States Code, which is the compilation of all the laws passed by Congress

The Internal Revenue Code is the law that requires people to pay taxes

The most important statutory provision with regard to income taxes is the very first:

section one of the tax code

26 U.S.C. § 1

Section one imposes the income tax

If you are unmarried, the relevant provision is § 1(c), which states:

26 U.S.C. § 1

There is hereby imposed on the taxable income of every individual . . . who is not a married individual a tax determined in accordance with the following table:

followed by a table specifying the tax rates on various income amounts

If you are married, you are covered by the similar provision at § 1(a)

§ 61

and

§ 63

Section 1 imposes the tax on your

taxable income

How do you know what that is?

Section 63 of the Code defines

taxable income

to mean

gross income minus the deductions allowed

by chapter 1 of the Code

So now we need to know what

gross income

is

Section 61 of the Code provides the critical definition:

26 U.S.C. § 61

[G]ross income means all income from whatever source derived, including (but not limited to) the following items:

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;

(2) Gross income derived from business;

(3) Gains derived from dealings in property;

(4) Interest;

(5) Rents;

(6) Royalties;

(7) Dividends;

. . .

There are 15 items in the full list

(only the first seven are quoted here),

but the key part of the definition is that gross income means

all income from whatever source derived

So, between

sections

1,

61,

and

63,

the tax code passed by Congress imposes a tax on your taxable income, which includes all your income, from whatever source derived, less the deductions allowed by the tax laws

Now, how do you know that you have to file a tax return and actually pay the tax?

§ 6012

and

§ 6151

Section 6151 of the code, 26 U.S.C. § 6151, says:

26 U.S.C. § 6151

[W]hen a return of tax is required under this title or regulations, the person required to make such return shall, without assessment or notice and demand from the Secretary, pay such tax to the internal revenue officer with whom the return is filed, and shall pay such tax at the time and place fixed for filing the return

(determined without regard to any extension of time for filing the return)

So according to this section, if you are required to file a tax return, you are required to pay the tax owed, to pay it at the time you file your return, and to pay it to the internal revenue officer with whom you file the return

But who says you’re required to file the return?

Turn back to section 6012(a) of the code, 26 U.S.C. § 6012(a), which provides:

26 U.S.C. § 6012(a)

Returns with respect to income taxes * * * shall be made by the following:

(1)(A) Every individual having for the taxable year gross income which equals or exceeds * * * the exemption amount plus the basic standard deduction * * *

The

exemption amount

is defined in 26 U.S.C. § 151(d) as $2000, adjusted for inflation since 1989

The

basic standard deduction

is defined in 26 U.S.C. § 63(c) as $3000, also adjusted for inflation

You can see the adjusted amounts for the current tax year in the IRS instructions to form 1040

If you have more income than the sum of the two amounts, section 6012 requires you to file a tax return

So there it is:

Sections

1,

61,

and

63

impose the tax

Section 6012 requires you to file a tax return if you have income of more than the exemption amount plus the basic standard deduction,

and

Section 6151 requires you to pay the tax at the time and place fixed for the filing of your return

§ 6072

And when is your return due?

Section 6072 provides the answer:

“[R]eturns made on the basis of the calendar year shall be filed on or before the 15th day of April following the close of the calendar year

This is the statutory basis for the familiar April 15 tax deadline

Of course, there’s a lot more to know if you want to achieve a full understanding of the tax system

For example, other statutory provisions besides the ones quoted above create the system of tax withholding, whereby you actually pay your taxes on your wages in advance, each time you receive a paycheck, so that on the day your return is due the government usually ends up owing you a refund

If you have substantial amounts of income other than wages, there are other sections that require you to pay estimated taxes each quarter

And, needless to say, there are innumerable statutory provisions that more specifically define how much income tax you owe

But you only need to look at a few simple statutory sections, shown above, to see that the duty to pay income tax is mandatory

You can look up the above statutes yourself in any law library or online

These statutes demonstrate that the claim that there is no law requiring average Americans to file income tax returns or pay income tax is complete nonsense
——————————————————————
http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/JustNoLaw.htm
——————————————————————
defines

gross income

to

include

all income from whatever source derived

There is no requirement that income be tied to any kind of

privilege,”

federal

or

otherwise,

to count for tax purposes

For tax purposes,

gross income

includes

all income

from whatever source derived,

not just income tied

to a federal privilege

That’s it, really

It’s very simple

Hendrickson‘s Mistake

So how could Hendrickson and other tax protestors come up with the kooky

privilege

theory?

As is often true, the theory is based on an irrelevant section of the tax code — which is misinterpreted

Hendrickson bases

(see p. 59)
_____________________________________

——————————————————————
http://losthorizons.com/CtCforFree.pdf
——————————————————————
his erroneous view on

section 3401

of the tax code

Section 3401

defines

wages

as

all remuneration

(other than fees paid to a public official)

for services performed by an employee for his employer

Then it defines

employee

as follows:

26 U.S.C. § 3401(c)

For purposes of this chapter, the term

employee

includes

an

officer,

employee,

or

elected official

of the United States,

a State,

or any political subdivision thereof,

or

the District of Columbia,

or

any

agency

or

instrumentality

of any one or more of the foregoing

The term

employee

also

includes

an officer of a corporation

As you can see, the definition provides that the term

employee

includes

federal officials

Therefore, Hendrickson argues, the term

does not include

ordinary employees of ordinary private companies

So, Hendrickson argues, ordinary employees’ wages are not taxable.

This argument is nonsense

There are two reasons

First, the word

includes

does not mean

includes only

Section 3401(c)

provides that the term

employee

includes

federal officials,

but it doesn’t say that it

includes

only federal officials

Hendrickson’s absurd theories are built on his mistaken belief

(p. 37)
_____________________________________

——————————————————————
http://www.losthorizons.com/Intro.pdf
——————————————————————
that the term

includes

means

includes only,”

which it doesn’t

How do we know that

includes

doesn’t mean

includes only?

First,

this is clear from the ordinary, dictionary definition
_____________________________________________
include

verb (used with object), included, including

1. to contain, as a whole does parts or any part or element:

The package includes the computer, program, disks, and a manual

2. to place in an aggregate, class, category, or the like
——————————————————————
QUESTION: If you are a LAW Professor, why would you cite a normal dictionary instead of a LEGAL DICTIONARY, when writing about LAW ?
_____________________________________________
http://dictionary.reference.com/browse/include
_____________________________________________
of the term

include,”

which means

to contain as a part

But just in case that isn’t clear enough, the tax code nails it down by providing:

26 U.S.C. § 7701(c)

The terms

includes

and

including

when used in a definition contained in this title

shall not be deemed

to exclude other things

otherwise within the meaning

of the term defined

Thus, the tax code expressly states that a definition that provides that a term

includes

something is not limiting

Once this is understood, Hendrickson’s whole argument collapses

Moreover, in any event,

section 3401

has nothing to do with the question of what constitutes income for tax purposes

It isn’t in the part of the tax code that imposes the income tax

It’s in a different part of the tax code — the part that sets up the system of employer withholding of taxes from people’s wages

So even if Hendrickson were right about the meaning of the term

employee

(which he isn’t),

that wouldn’t prove that people don’t owe income tax on their wages

It would only prove that some people aren’t subject to income tax withholding on their wages

They’d just have to pay their income tax some other way

(like by sending in a check when they file their tax return)

Case Authority

But don’t take my word for it — let’s see what the courts have had to say about Hendrickson’s argument

In fact, let’s consider the opinions of courts in Hendrickson’s own cases

Hendrickson has been in court on multiple occasions

Guess what?

He lost, big time

Hendrickson got hauled into court after he filed tax returns falsely showing that he earned zero

“wages”,
_____________________________________________
Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 1 of 8
——————————————————————
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

-vs.-

PETER ERIC HENDRICKSON

and

DOREEN M. HENDRICKSON,

Defendants

Civil Action No. 06-11753

Hon. Nancy G. Edmunds
___________________________________/

United States v. Hendrickson

No. 06-11753

E.D. Mich. 2007
_____________________________________
http://www.ustaxcourt.gov/InOpHistoric/waltnermemo.buch.TCM.WPD.pdf
——————————————————————
http://www.gpo.gov/fdsys/pkg/USCOURTS-mied-2_07-cv-10688/pdf/USCOURTS-mied-2_07-cv-10688-0.pdf
_____________________________________________
http://www.justice.gov/tax/Hendrickson_AmendedJudgPermInj.pdf
_____________________________________________
AMENDED JUDGMENT AND ORDER OF PERMANENT INJUNCTION [23, 24]

Upon consideration of Plaintiff’s Motion to Amend Judgment, and any response thereto, good cause appearing, it is hereby
ORDERED, that Plaintiff’s Motion to Amend Judgment is GRANTED; and it is ADJUDGED and ORDERED that Defendant Peter Hendrickson and Defendant Doreen Hendrickson,

(collectively, “Defendants”)

are jointly indebted to Plaintiff for erroneous refunds for the 2002 and 2003 tax years as shown below:

2002 Tax Year

$10,152.96, plus interest accruing on the amounts of the erroneous refunds or credits from April 15, 2003, pursuant to 26 U.S.C. §§ 6602 and 6621(a)(2) until paid

2003 Tax Year

$7,055.70, plus interest accruing on the amounts of the erroneous refunds or credits from April 15, 2004, pursuant to 26 U.S.C. §§ 6602 and 6621(a)(2) until paid

$3,172.30, plus interest accruing on the amounts of the erroneous refunds or
——————————————————————
Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 2 of 8
——————————————————————
credits from October 4, 2004, pursuant to 26 U.S.C. §§ 6602 and 6621(a)(2) until paid

PERMANENT INJUNCTION

In accordance with Rule 65 of the Federal Rules of Civil Procedure, the Court makes the following findings of fact and sets forth the following conclusions of law

1. Plaintiff commenced this action on April 12, 2006, to recover the federal income tax refunds made to Defendants for the 2002 and 2003 tax years, and to obtain a permanent injunction

(1) requiring Defendants to amend their 2002 and 2003 federal income tax returns; and

(2) prohibiting Defendants from filing or continuing to file federal income tax returns that falsely claim that they received

zero

or no taxable income

2. Defendants are residents of Commerce Township, Michigan, within this judicial district, and were properly served with process on April 12, 2006

3. During 2002 and 2003, Defendant Peter Hendrickson was employed by Personnel Management, Inc., and earned wages of $58,965 and $60,608, respectively, during those years

2002 tax year

4. As required by law, Defendant Peter Hendrickson’s employer withheld federal income taxes

($5,642.20),

social security taxes

($3,655.83)

and Medicare taxes

($854.93)

from his wages in 2002 and paid over those amounts to the IRS

Also, as required by law, Mr. Hendrickson’s employer issued him a Form W-2 Wage and Tax Statement that correctly reported his wages and those withholdings

5. Defendant Doreen Hendrickson received $3,773.00 in non-employee compensation from Una E. Dworkin in 2002

As required by law, Dworkin provided her with a Form 1099 that correctly reported this non-employee compensation

-2-

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Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 3 of 8
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6. Defendants’ 2002 Form 1040 tax return, which was filed with the IRS in August of 2003, falsely reported

zero

wages on line 7

An IRS Form 4852 attached to the return falsely reported that Defendant Peter Hendrickson received no wages during 2002

The Form 4852 did report that federal income taxes

($5,642.20),

social security

($3,655.83)

and Medicare taxes

($854.93)

totaling $10,152.96 had been withheld from his wages during 2002

7. Defendant Peter Hendrickson also claimed on his Form 4852 that he had asked his employer to

“issue forms correctly listing payments of

‘wages as defined in

[sections]

3401(a) and 3121(a),’ but that his company had refused for

‘fear of IRS retaliation.’”

8. Defendants requested, on line 70 of their joint 2002 tax return, a refund of the $10,152.96 in federal income, social security, and Medicare taxes that had been withheld from Defendant Peter Hendrickson’s wages during 2002

9. Because Defendants reported that they had no income, the IRS, unaware that Defendants’ report was false, treated the withheld federal taxes as a tax overpayments and applied them on April 15, 2003 to

(1) Defendant Doreen Hendrickson’s unpaid 2000 tax liability

($1,699.86);

and

(2) the outstanding tax balances owed by Defendant Peter Hendrickson for 2001

($6,521.11)

and 2000

($1,931.99)

10. The refunds or credits described above were erroneous within the meaning of IRC § 7405(b)

Defendants were not entitled to refunds of federal income taxes for 2002 because their federal income tax liability for that year – $6,327.00 – exceeded the amount of the federal income taxes withheld from Defendant Peter Hendrickson’s

-3-

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Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 4 of 8
——————————————————————
wages by his employer

($5,642.20),

which constituted the only tax payments made by Defendants in 2002

Furthermore, Defendants were not entitled to a refund, under any circumstances, of the social security and Medicare taxes that had been withheld from Defendant Peter Hendrickson’s wages during 2002

2003 tax year

11. As required by law, Defendant Peter Hendrickson’s employer withheld federal income taxes

($5,620.02),

social security taxes

($3,757.60)

and Medicare taxes

($878.72)

from his wages in 2003 and paid over those amounts to the IRS

Also, as required by law, Mr. Hendrickson’s employer issued him a Form W-2 Wage and Tax Statement that correctly reported his wages and those withholdings

12. Defendant Doreen Hendrickson received $3,188.00 in non-employee compensation from Una E. Dworkin in 2003

As required by law, Dworkin provided her with a Form 1099 that correctly reported this non-employee compensation

13. Defendants’ 2003 Form 1040 tax return falsely reported

zero

wages on line 7

An IRS Form 4852 attached to the return reported that Defendant Peter Hendrickson received no wages during 2003

The Form 4852 did report that federal income taxes

($5,620.02),

social security

($3,757.60)

and Medicare taxes

($878.72)

totaling $10,256.34 had been withheld from his wages during 2003

14. Defendant Peter Hendrickson also claimed on his Form 4852 that he had asked his employer to

“issue forms correctly listing payments of

‘wages as defined in

[sections]

3401(a) and 3121(a),’

but that his company had refused for

‘fear of IRS retaliation’”

15. Defendants requested, on their joint 2003 tax return, a refund of the

-4-

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Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 5 of 8
——————————————————————
10,228.00 in federal income, social security, and Medicare taxes that had been withheld from Defendant Peter Hendrickson’s wages during 2003

16. Because Defendants reported that they had no income, the IRS, unaware that Defendant’s report was false, treated the withheld federal taxes as tax overpayments and applied them on April 15, 2004 to

(1) Defendant Peter Hendrickson’s unpaid 2000 tax liability

($5,551.44);

and

(2) three frivolous return penalties that had been assessed against Defendants under IRC § 6702

($515.66, $553.17 and $529.18)

The IRS also sent a refund check sent to Defendants on October 10, 2004 in the amount of $3,172.30.

17. The refunds or credits described above were erroneous within the meaning of IRC § 7405(b)

Defendants were not entitled to refunds of federal income taxes for 2003 because their federal income tax liability for that year – $6,061.00 – exceeded the amount of the federal income taxes withheld from Defendant Peter Hendrickson’s wages by his employer

($5,620.02),

which constituted the only tax payments made by Defendants in 2003

Furthermore, Defendants were not entitled to a refund, under any circumstances, of the social security and Medicare taxes that had been withheld from Defendant Peter Hendrickson’s wages during 2003

18. Defendants contend that their Forms 4852, as described above, accurately reported that they received no wages or other compensation in 2002 and 2003. Defendants base their contention on theories contained in a book entitled Cracking the Code, which was written by Defendant Peter Hendrickson

On page 76 of Cracking the Code

(“CtC”),

Defendant Peter Hendrickson, states

“So, actually, withholding only applies to the pay of federal government workers, exactly as it always has

(plus

‘State’

-5-

——————————————————————

Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 6 of 8
——————————————————————
government workers, since 1939, and those of the District of Columbia since 1921)”

19. Defendants’ contention that withholding applies only to government workers is frivolous and false

See, e.g.,

Sullivan v. United States,

788 F.2d 813, 815

(1st Cir. 1986);

United States v. Latham,

754 F.2d 747, 750

(7th Cir. 1985);
……………………………………………….
http://law.justia.com/cases/federal/appellate-courts/F2/788/813/300441/
……………………………………………….
(contention that

“under 26 U.S.C. § 3401(c) the category of

‘employee’

does not include privately employed wage earners is a preposterous reading of the statute”);
……………………………………………….
https://law.resource.org/pub/us/case/reporter/F2/754/754.F2d.747.83-2686.html
……………………………………………….
OConnor v. United States,

669 F. Supp. 317, 322

(D. Nev. 1987)
……………………………………………….
http://law.justia.com/cases/federal/district-courts/FSupp/669/317/2370630/
……………………………………………….
Defendant Peter Hendrickson was an employee of Personnel Management, Inc. in 2002 and 2003 within the meaning of IRC § 3401(c)

Defendant Peter Hendrickson’s employer properly withheld federal income and employment taxes from his wages
……………………………………………….
http://nv.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19880810_0000025.DNV.htm/qx
……………………………………………….
20. In addition to the monetary loss occasioned by the erroneous tax refunds that the IRS made to or on behalf of Defendants, their conduct in filing false tax returns caused substantial interference with the internal revenue laws by administratively burdening the IRS, requiring the agency to expend considerable resources to detect the erroneous refunds, examine Defendants’ 2002 and 2003 Form 1040 tax returns, and obtain the documents necessary to prove that the refunds were erroneous

21. In order to qualify for injunctive relief under Rule 65 of the Federal Rules of Civil Procedure, Plaintiff must establish

(1) the likelihood of the government’s success on merits;

(2) whether the injunction will save Plaintiff from irreparable injury;

(3) whether the injunction would harm others; and

(4) whether the public interest would be served by the injunction

See

Southern Milk Sales, Inc. v. Martin,

924 F.2d 98, 103 n.3
……………………………………………….
http://law.justia.com/cases/federal/appellate-courts/F2/924/98/224163/
……………………………………………….
(6th Cir. 1991);
……………………………………………….
https://law.resource.org/pub/us/case/reporter/F2/924/924.F2d.98.89-2139.90-1029.html
……………………………………………….
In re DeLorean Motor Co.,

755 F.2d 1223, 1228

(6th Cir. 1985)
……………………………………………….
https://law.resource.org/pub/us/case/reporter/F2/755/755.F2d.1223.83-1803.83-1802.html
……………………………………………….
22. Plaintiff has prevailed on the merits of its erroneous refund claims against

-6-

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Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 7 of 8
——————————————————————
Defendants as reflected in the prior order adopting in part and rejecting in part the Magistrate Judge’s Report and Recommendation with respect to Plaintiff’s motion for summary judgment

23. Defendants’ actions impose an immediate and irreparable injury on Plaintiff by impeding, impairing and obstructing the assessment and collection of federal taxes in accordance with the internal revenue laws

24. In the absence of an injunction, Plaintiff will continue to suffer irreparable injury as Defendants and those who imitate them continue to file false tax returns

Since Plaintiff has met all of the proper standards and the traditional equity criteria for the entry of a permanent injunction under IRC § 7402(a), a permanent injunction should issue

25. Defendants will not be harmed by the entry of an injunction against them because they will only be required to obey the law, including the provisions of the Internal Revenue Code and the applicable Treasury Regulations

26. Finally, the United States’ system of taxation relies on self-assessment and the good faith and integrity of taxpayers to disclose completely and honestly all information relevant to their tax liability

The public interest will be accordingly be served by requiring Defendants to correctly report the income that they receive on their federal tax returns

27. Accordingly, it is hereby
ORDERED, that Defendants are prohibited from filing any tax return, amended return, form

(including, but not limited to Form 4852

(“Substitute for Form

W-2 Wage and Tax Statement, etc.”))

or other writing or paper with the IRS that is based on the

-7-

——————————————————————
Case 2:06-cv-11753-NGE-RSW Document 34 Filed 05/02/2007 Page 8 of 8
——————————————————————
false and frivolous claims set forth in Cracking the Code that only federal, state or local government workers are liable for the payment of federal income tax or subject to the withholding of federal income, social security and Medicare taxes from their wages under the internal revenue laws

(26 U.S.C.);

and it is further

ORDERED, that within 30 days of the entry of this Amended Judgment and Order of Permanent Injunction, Defendants will file amended U.S. Individual Income Tax Returns for the taxable years ending on December 31, 2002 and December 31, 2003 with the Internal Revenue Service

The amended tax returns to be filed by Defendants shall include, in Defendants’ gross income for the 2002 and 2003 taxable years, the amounts that Defendant Peter Hendrickson received from his former employer, Personnel Management, Inc., during 2002 and 2003, as well the amounts that Defendant Doreen Hendrickson received from Una E. Dworkin during 2002 and 2003

SO ORDERED

Dated: May 2, 2007

s/Nancy G. Edmunds Nancy G. Edmunds

United States District Judge

I hereby certify that a copy of the foregoing document was served upon counsel of record on May 2, 2007, by electronic and/or ordinary mail

s/Carol A. Hemeyer Case Manager

-8-

_____________________________________________
http://www.justice.gov/tax/Hendrickson_AmendedJudgPermInj.pdf
_____________________________________________
even though his employer paid him what any normal person would call

wages

and withheld federal income tax from them

Hendrickson sought a refund of the tax withheld

As is often the case, the IRS started by trusting the returns

It refunded or credited to Hendrickson the amounts he claimed

(The IRS has millions of returns to process and can’t catch everything right away)

Later, the IRS caught up with Hendrickson, and he was the subject of multiple court cases

In a civil case against Hendrickson,

United States v. Hendrickson,

No. 06-11753

(E.D. Mich. 2007),
_____________________________________

——————————————————————
http://www.justice.gov/tax/Hendrickson_AmendedJudgPermInj.pdf
——————————————————————
the court determined that Hendrickson and his wife were indebted to the United States for the erroneous refunds or credits they had received

The court said

(bolding added):

Defendants’ contention that withholding applies only to government workers is frivolous and false

See, e.g.,

Sullivan v. United States,

788 F.2d 813, 815

(1st Cir. 1986);

United States v. Latham,

754 F.2d 747, 750

(7th Cir. 1985);

(contention that

“under 26 U.S.C. § 3401(c)

the category of

employee

does not include privately employed wage earners is a preposterous reading of the statute”)

On appeal, the court‘s judgment was affirmed
_____________________________________
_____________________________________
Case 2:06-cv-11753-NGE-RSW 

Document 37 

Filed 06/12/2008

Page 1 of 6
——————————————————————
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

FILED

Jun 11, 2008 

LEONARD GREEN, 

Clerk

No. 07-1510

UNITED STATES COURT OF APPEALS 

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

PETER E. HENDRICKSON; 

DOREEN M. HENDRICKSON, 

Defendants-Appellants. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF MICHIGAN

O R D E R

Before: 

GIBBONS and SUTTON, 

Circuit Judges; 

ACKERMAN, 

District Judge*

Peter E. and Doreen M. Hendrickson, pro se Michigan residents, appeal a district court grant of summary judgment for the government in this action to recover erroneous tax refunds filed under 26 U.S.C. § 7405(b)

This case has been referred to a panel of the court pursuant to Rule 34(j)(1), Rules of the Sixth Circuit

Upon examination, this panel unanimously agrees that oral argument is not needed

Fed. R. App. P. 34(a)

Peter E. Hendrickson is a tax protester who pled guilty to reduced charges for his role in a conspiracy to place a firebomb in a post office bin as a tax protest, which resulted in injuries to a postal worker and a bystander

See 

United States v. Scarborough, 

43 F.3d 1021, 1023 

(6th Cir. 1994)

Hendrickson subsequently wrote a book entitled 

“Cracking the Code: 

The Fascinating Truth About Taxation in America” 

in which he apparently advocates improper schemes others have followed to avoid paying federal income tax

See 

United States v. Hunn, 

No. CV06-1458-PCT-FJM,

*The Honorable Harold A. Ackerman, United States District Judge for the District of New Jersey, sitting by designation
——————————————————————
Case 2:06-cv-11753-NGE-RSW 

Document 37 

Filed 06/12/2008 

Page 2 of 6
——————————————————————
No. 07-1510 

– 2-

2006 WL 2663783, at *3 

(D. Ariz. Aug. 18, 2006); 

United States v. Hill, 

No. CV-05-877-PHX- DGC, 

2005 WL 3536118, at *5 n.2 

(D. Ariz. Dec. 22, 2005)

The government filed its complaint on April 12, 2006, seeking to recover amounts refunded to the Hendricksons pursuant to fraudulent tax returns filed for the 2002 and 2003 tax years

In addition, the government sought injunctive relief pursuant to 26 U.S.C. § 7402(a) to compel the Hendricksons to file corrected 2002 and 2003 tax returns and to prohibit them from filing fraudulent tax documents in the future

The Hendricksons moved to dismiss the complaint, and the matter was referred to the magistrate judge

The government responded in opposition to the motion to dismiss, and the Hendricksons filed a reply

In addition, the government moved for summary judgment, the Hendricksons filed a response, and the government filed a reply

The magistrate judge recommended that the Hendricksons’ motion to dismiss be denied and that the government’s motion for summary judgment be granted except with respect to the injunctive relief sought, and the Hendricksons filed objections to both recommendations

The district court adopted the magistrate judge’s recommendation and denied the Hendricksons’ motion to dismiss, and adopted in part the magistrate judge’s recommendation that summary judgment for the government be granted, but also granted the government’s request for injunctive relief to require amended 2002 and 2003 returns

The government filed a motion to amend the judgment, and the Hendricksons filed motions for relief from judgment and for reconsideration

The government responded in opposition to the motion for relief from judgment, and the Hendricksons filed a reply and a notice of appeal

The district court denied the Hendricksons’ motions, but granted the government’s motion and entered an amended judgment and order of permanent injunction

The Hendricksons filed a timely amended notice of appeal

On appeal, the Hendricksons make numerous challenges to the district court’s jurisdiction and judgment which fairly can be characterized as plainly baseless tax protester arguments

The government responds that the district court’s judgment was proper, and has filed a separate motion for sanctions in the amount of $8,000.00 pursuant to Fed. R. App. P. 38

The Hendricksons have
——————————————————————
Case 2:06-cv-11753-NGE-RSW 

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Filed 06/12/2008 

Page 3 of 6
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– 3-

not responded to the government’s motion

Upon consideration, we grant the motion for sanctions in part, and affirm the district court’s judgment

This court reviews de novo a district court grant of summary judgment, making any reasonable inference in favor of the non-moving party

United States v. Guy, 

978 F.2d 934, 936 

(6th Cir. 1992); 

EEOC v. Univ. of Detroit, 

904 F.2d 331, 332 

(6th Cir. 1990)

Generally, summary judgment is proper where no genuine issue exists as to any material fact and the moving party is entitled to a judgment as a matter of law

Celotex Corp. v. Catrett, 

477 U.S. 317, 322-23 

(1986); 

Guy, 978 F.2d at 936

The burden is upon the moving party to show 

“that there is an absence of evidence to support the nonmoving party’s case” 

Celotex Corp., 

477 U.S. at 325

Thereafter, the nonmoving party must present significant probative evidence in support of the complaint to defeat the motion

Anderson v. Liberty Lobby, Inc., 

477 U.S. 242, 249-50 

(1986)

The nonmoving party is required to show more than a metaphysical doubt as to the existence of a genuine issue of material fact

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

475 U.S. 574, 586 

(1986)

Here, summary judgment for the government was proper

First, the Hendricksons’ jurisdictional challenges lack merit

The United States plainly may sue for return of taxes erroneously refunded pursuant to 26 U.S.C. § 7405(b)

Guy, 978 F.2d at 938

Moreover, 26 U.S.C. § 7402(a) gives district courts the authority to grant injunctions 

“necessary or appropriate for the enforcement of the internal revenue laws” 

United States v. First Nat’l City Bank, 

379 U.S. 378, 380 

(1965)

The Hendricksons’ initial assertion on appeal, that the district court lacked jurisdiction in this case because another statutory provision, 26 U.S.C. § 6201, authorizes and requires the Secretary of the Treasury to determine and assess taxes, was properly rejected by the district court as irrelevant and patently meritless

The Hendricksons’ remaining jurisdictional challenges at least arguably were not asserted in the district court, and should not be considered in the first instance on appeal

See 

Weinberger v. United States, 

268 F.3d 346, 352 

(6th Cir. 2001) 

(citing Foster v. Barilow, 

6 F.3d 405, 407 

(6th Cir. 1993))

Nonetheless, it is noted that the challenges are patently meritless

For example, the Hendricksons’ assertion that the government lacks standing under 26 U.S.C. § 7405(b) to seek return of taxes not already determined is wholly
——————————————————————
Case 2:06-cv-11753-NGE-RSW 

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Page 4 of 6
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No. 07-1510 

– 4-

unsubstantiated as is their equally meritless contention that the district court lacks jurisdiction to determine tax liability

Similarly, an executive order that requires 

“litigation counsel” 

to attempt to settle a dispute, or to confirm that the referring agency has attempted to settle a dispute before filing suit, while laudable, simply does not deprive the district court of jurisdiction

The Hendricksons’ remaining jurisdictional challenges are equally meritless

The Hendricksons’ remaining claims also plainly lack merit

First, the Hendricksons contend that the district court improperly weighted the evidence in favor of the government when it found that Peter E. Hendrickson was an 

“employee” 

who had been paid 

“wages,” 

and that Doreen M. Hendrickson had received 

“non-employee compensation” 

However, this contention is tantamount to a typical tax protester argument that the income at issue is not taxable

Cf. Weston v. Comm’r, 

775 F.2d 147, 147-48 

(6th Cir. 1985)

Finally, the assertion that the government is prohibited from suggesting that Peter E. Hendrickson’s book promotes false or fraudulent tax schemes because the subject of the book was addressed in prior litigation is plainly meritless

Accordingly, the Hendricksons’ remaining claims are meritless, and the district court properly granted summary judgment for the government in this case

Given the patent baselessness of the Hendricksons’ assertions on appeal, the government’s motion for sanctions will be granted, but only in the amount of $4,000.00

As noted, the government seeks $8,000.00, an amount it contends is justified by records that show that average costs incurred in frivolous taxpayer appeals in 2004 and 2005 exceeded $11,000.00

However, this court consistently has awarded $4,000.00 sanctions in frivolous tax protester appeals

See 

Raft v. Comm’r, 

147 F. App’x 458, 462-63 

(6th Cir. 2005)

Under these circumstances, the government’s motion for sanctions will be granted in the amount of $4,000.00

Finally, it is noted that an unrelated non-lawyer, Charles Bassett, has filed an admittedly untimely motion for leave to file an amicus curiae brief in this case pursuant to Fed. R. App. P. 29

Review of the brief reflects only patently meritless tax protester claims, so the brief adds nothing helpful to the disposition of this appeal

For this reason, and because the motion is untimely, the motion is denied
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Filed 06/12/2008 

Page 5 of 6
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For the foregoing reasons, the government’s motion for sanctions is granted in the amount of $4,000.00, and the district court’s judgment is affirmed

See 

Rule 34(j)(2)(C), Rules of the Sixth Circuit

ENTERED BY ORDER OF THE COURT

Leonard Green Clerk
——————————————————————
Case 2:06-cv-11753-NGE-RSW 

Document 37 

Filed 06/12/2008 

Page 6 of 6
——————————————————————
Leonard Green Clerk

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

100 EAST FIFTH STREET, ROOM 540 

POTTER STEWART U.S. COURTHOUSE 

CINCINNATI, OHIO 45202-3988

Tel. (513) 564-7000

http://www.ca6.uscourts.gov

Peter E. Hendrickson

232 Oriole Road

Commerce Township, MI 48382-0000

Re: Case No. 07-1510, 

USA v. Hendrickson, et al 

Originating Case No. : 06-11753

Dear Sir or Madam,

The Court issued the enclosed 

(Order/Opinion) 

today in this case

Filed: June 12, 2008

Sincerely yours,

s/Scott J. Swearingen

Case Manager

Direct Dial No. 513-564-7011 

Fax No. 513-564-7096

cc: 

Mr. Bruce R. Ellisen 

Robert D. Metcalfe

Mr. John A. Nolet 

Stephen J. Schaeffer

Mr. Anthony T. Sheehan 

William L. Woodward

Honorable R. Steven Whalen 

Mr. David J. Weaver

Charles K. Bassett 

Doreen M. Hendrickson

Enclosure
_____________________________________________
http://www.losthorizons.com/Newsletter/hendrickson_app371.pdf
——————————————————————
and the Hendricksons were fined a further $4,000 for the

patent baselessness

of their arguments

Hendrickson’s troubles weren’t over

The government prosecuted Hendrickson criminally

In that case, Hendrickson continued to rely on his absurd theories

He filed a copiously briefed
_____________________________________

——————————————————————
http://www.losthorizons.com/Newsletter/CriminalAssault/PostRule29Brief.pdf
——————————————————————
motion for acquittal, in which he pressed his bizarre understanding of the word

includes

and argued that the case against him had to be dismissed under the law

Denying the motion, the court observed
_____________________________________

——————————————————————
http://www.quatloos.com/Q-Forum/viewtopic.php?f=8&t=5802&start=0
——————————————————————
that:

The courts have uniformly held that the ordinary remuneration received by privately employed workers qualifies as taxable

wages

under the Internal Revenue Code

Hendrickson was convicted and sentenced to nearly three years in federal prison
_____________________________________

——————————————————————
http://www.ca6.uscourts.gov/opinions.pdf/12a0156n-06.pdf
——————————————————————
and ordered to pay over $40,000 in fines and restitution

So the courts have squarely determined Hendrickson’s theories to be wrong — indeed, not just wrong, but

frivolous,”

false,”

and

preposterous

(Update:

On February 8, 2012,

Hendrickson’s conviction was affirmed
_____________________________________

——————————————————————
http://www.ca6.uscourts.gov/opinions.pdf/12a0156n-06.pdf
——————————————————————
but the court of appeals determined that there had been an error in his sentence

On May 15, 2012,

his prison sentence was reduced from 33 months to 27 months)

If anybody could make the Cracking the Code theories work in court, it would be the guy who wrote the book — Hendrickson himself

But in fact, he lost his own cases

His theories are wrong and they do not work

Hendrickson’s followers haven’t had any luck in court either

An employee of Dell Products who earned about $150,000 a year filed amended tax returns based on

Cracking the Code,

claimed that he earned zero wages, and sought a refund of all amounts withheld from his pay

When his case got to court, not only did he lose, but he was fined an additional $20,000 for pursuing frivolous arguments

Montero v. Commmisioner,

354 Fed. Appx. 173

(5th Cir. 2009)

Another Hendrickson follower, a Northwest Airlines pilot, claimed that the money he received from Northwest was not taxable income because Northwest is a

private sector company, which is not owned or operated on behalf of the United States

(i.e.,

no federal

privilege

was involved in his work)

The court said that that was

immaterial

to whether the money was taxable income

The court noted that the pilot’s theory appeared to be based on

Cracking the Code

and characterized it as

a frivolous tax-protestor argument

The pilot lost

Nelson v. U.S.,

2009 WL 5851082

(N.D. Fla. 2009)

In short, like other tax protestor arguments, Hendrickson’s argument has been to court many times and has a batting average of zero

It certainly didn’t work out for Hendrickson in his own cases

So What About All Those

Victories?

So how could anyone ever fall for Hendrickson’s nonsense?

One thing helps him fool people: some people have actually obtained tax refunds using his method

Images of their refund checks, and in some cases the underlying tax filings that led to them, are posted
_____________________________________

——————————————————————
http://losthorizons.com/BulletinBoard.htm
——————————————————————
as

victories

on Hendrickson’s website

If Hendrickson’s arguments and methods are nonsense, why does the IRS sometimes issue refunds to people who use them?

This happens because the IRS has over 100 million returns to process every year and can’t catch everything right away

The IRS wants to get refunds out quickly

So in many cases the IRS starts out by trusting the filed return

If you file a return showing that you are owed a refund, the IRS may send it to you, even if the return is filled with fake numbers that you made up

But later, the IRS can check more carefully

What Hendrickson doesn’t tell you on his

victories

page is that the IRS later catches up with a lot of the people who got initial refunds using his method

And when it does catch up with them, it collects the refund back, plus interest, plus penalties

In many cases the penalties include a $5,000 penalty for filing a frivolous return

Hendrickson’s own story is a good illustration

As mentioned above, he initially got refunds or credits using his method, but later the IRS came after him and got a judgment that he owed the money back, plus interest and penalties

And he went to prison to boot

Not exactly a roaring success

In addition, starting in the mid-2000s, the IRS reprogrammed its computers
_____________________________________

——————————————————————
http://www.rothcpa.com/archives/001949.php
——————————————————————
to catch people using Hendrickson’s method even before the initial refund check goes out

So while some Hendrickson-style filings still slip through, it’s harder than it used to be to get even an initial refund using his method

Hendrickson’s web forum
_____________________________________

——————————————————————
http://losthorizons.com/phpBB/index.php
——————————————————————
is filled with stories of people who tried to use his method and who are getting hit up with $5,000 penalties for frivolous filings

So if you file a return that falsely says that your W-2 is a mistake and that in fact you received no wages, it may initially produce a refund

But it’s more likely to produce a $5,000 penalty

And even if you get an initial refund, the IRS can catch up with you later and get the money back, plus interest and penalties
——————————————————————
http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/privilege.htm
_________________________________________________
On Wed, Sep 10, 2014 at 10:45 PM,

@Razor_Cabrone wrote:

Dear Professor Jon (Jonathan) R. Siegel,

with all due respect,

this is why I’m not buying

what you’re selling:
_________________________________________________
http://www.wikipediaint.wordpress.com/2014/08/21/wikipedia-and-wiki-wikipediaint-when-it-comes-to-the-internal-revenue-service-irs/
——————————————————————
http://www.wikipediaint.wordpress.com/about
_________________________________________________
Jonathan Siegel

September 11, 2014 at 8:24 AM

Thanks for your message

The page that you link has many different arguments on it, and I’m not sure which you are referring to

But here are answers to some of the wrong arguments on that page:

* Definition of “taxpayer”:

Yes, it’s true,

Title 26, section 7701,

defines

“taxpayer”

as

“any person subject to any internal revenue tax.”

But

sections

1,
61,
63,
6012,
and
6151

subject ordinary Americans to the income tax

Therefore, ordinary Americans are

“taxpayers”

as defined in the code

* Constitutional power to tax:

The page you link cites the wrong provision of Article I, section 8 of the Constitution

Congress’s power to tax does not derive from the Seat of Government clause, which the page quotes

It derives from the simple provision of Article I, section 8, that says:

“The Congress shall have Power To lay and collect Taxes . . .”

That power applies everywhere in the

United States,

not just in the

District of Columbia

* “Includes”:

This is the wrong argument most associated with Peter Hendrickson

Yes, there is a provision in the tax code that says that the term

“employee”

includes

federal officials

But it doesn’t say

it includes only federal officials

The word

“include”

means

“to contain as a part”

Section 7701

nails this down by stating that

“The terms

“includes”

and

“including”

when used in a definition

contained in this title

shall not be deemed to exclude

other things

otherwise within the meaning

of the term defined”

So while the code makes clear that

the term

“employee”

includes

federal officials,

that does not exclude

its common meaning

of ordinary employees

of private companies

This has been established in court

hundreds of times,

including in

Peter Hendrickson’s own case,

where the court said

that Hendrickson’s argument

that the term

“employee”

is limited to federal officials

was

“preposterous”

This point is explained in detail here

* One more wrong point on the page you link is that

“Federal Reserve Notes”

are

“NOT money . . . they are ‘Debt’ paper”

If you think that any

Federal Reserve Notes you have

are not money,

but are only

“debt” paper,

the solution is simple:

send them to me

I will be happy to take any

Federal Reserve Notes off your hands

if you don’t think they are valuable

Jon Siegel
——————————————————————
Jonathan R. Siegel

Professor of Law

Davis Research Professor

George Washington University Law School

2000 H St. NW, Washington, DC 20052

202-994-7453 (phone)

202-994-5614 (fax)
_________________________________________________
September 11, 2014 at 1:01 PM

Dear Professor Siegel,

Thank you for your quick response

Rather than respond to all 3 sections of your reply, I will respond to one at a time

In case you are not aware,

ordinary Americans are NOT just

any person

The term “person” is a legal fiction
_____________________________________________
Person defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/26/person/
_____________________________________________
just as a “corporation” is a legal fiction
_____________________________________________
corporation defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/09/04/corporation/
_____________________________________________
A review of all

of the U.S. Code titles

indicates that

the United States Congress

has referred to

human beings

as

natural persons
_____________________________________________
Natural Person defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/26/natural-person/
_____________________________________________
Additionally,

the United States Government

must have

jurisdiction
_____________________________________________
Federal Jurisdiction
—————————————————————–
https://wikipediaint.wordpress.com/2014/09/10/federal-jurisdiction/
_____________________________________________
over the

person,”

place,”

or

thing

which the United States Congress

wishes to tax

1. Any “personwithin the District of Columbia or Federal areas within the several States

2. United States citizens (those born in the District of Columbia or Federal areas within the several States and born in the territorial waters of the U.S. (generally 3 miles from shore) _____________________________________________
citizen of the United States defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/26/citizen-of-the-united-states/
_____________________________________________
3. Those who “voluntarily” sign up for Social Security
_____________________________________________
Social Security
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/27/social-security/
_____________________________________________
And last, but not least, the terms

United States
_____________________________________________
United States defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/24/united-states/
_____________________________________________
and

State
_____________________________________________
State(s) defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/24/states/
_____________________________________________
where defined in Title 26, do NOTinclude” the “several States

Do you expect me to believe

that the “lawmaker

(the U.S. Congress)

does NOT know how

to include

the “several States

in a definition

when it means to do so ?
_____________________________________________
September 11, 2014 at 3:29 PM

Dear Professor Siegel,

Are you suggesting that the United States Federal Government does NOT understand the limitations of jurisdiction ?
_____________________________________________
JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES:

REPORT OF THE INTERDEPARTMENTAL COMMITTEE FOR THE STUDY OF JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES

(April 27, 1956)

Part I
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/25/jurisdiction-over-federal-areas-within-the-states-report-of-the-interdepartmental-committee-for-the-study-of-jurisdiction-over-federal-areas-within-the-states-april-27-1956/
_____________________________________________
http://www.constitution.org/juris/fjur/fed_jur.htm
—————————————————————–
http://www.constitution.org/juris/fjur/fj0-0000.htm
—————————————————————–
http://www.constitution.org/juris/fjur/fedjurisreport.pdf
—————————————————————–
http://www.defendruralamerica.com/files/DSJurisdictionReport1957.pdf
_____________________________________________
JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES:

REPORT OF THE INTERDEPARTMENTAL COMMITTEE FOR THE STUDY OF JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES

Part II — A Text of the Law of Legislative Jurisdiction
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/26/jurisdiction-over-federal-areas-within-the-states-report-of-the-interdepartmental-committee-for-the-study-of-jurisdiction-over-federal-areas-within-the-states-part-ii-a-text-of-the-law-of/
_____________________________________________
Do you disagree that there are

two (2) “United States;”

the

Federal United States

and

United States of America,

and that the

United States Congress

is bound by the

Federal Constitution

as to where they may legislate,

based on Constitutional restrictions,

and the whim of how the

Supreme Court of the United States

defines that power at any given time ?
_________________________________________________
September 11, 2014 at 4:05 PM

Dear Professor Siegel,

Based on your premise:
_________________________________________________
U.S. Code › Title 26 › Subtitle F› Chapter 79 › § 7701
——————————————————————
TITLE 26 – INTERNAL REVENUE CODE
——————————————————————
26 U.S. Code § 7701Definitions
——————————————————————
When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—

(c) Includes and including

The terms

INCLUDES

and

INCLUDING

when used in a definition contained in this title

shall not be deemed to EXCLUDE other things otherwise within the meaning of the term defined
_________________________________________________
http://www.law.cornell.edu/uscode/text/26/7701
_________________________________________________
Why does the definition of “employeeINCLUDE:
_________________________________________________
U.S. Code › Title 26 › Subtitle C › Chapter 24 › § 3401
——————————————————————
TITLE 26 – INTERNAL REVENUE CODE
——————————————————————
26 U.S. Code § 3401 – Definitions
——————————————————————
(c) Employee

For purposes of this chapter, the term

EMPLOYEE

INCLUDES

an OFFICER,

The term

EMPLOYEE

also INCLUDES

an OFFICER of a corporation
_________________________________________________
http://www.law.cornell.edu/uscode/text/26/3401
_________________________________________________
If the terms

INCLUDES

and

INCLUDING

are NOT words of LIMITATION, why is the term “OFFICER” listed two (2) times ?

If

INCLUDES

and

INCLUDING

were words of EXPANSION, would that NOT mean that there would be no need for the term “OFFICER” to be repeated ?

Would the term “OFFICER” listed once, NOT suffice for meaning an

OFFICER

and an

OFFICER of a corporation ?

Do you see the folly of the theory that

shall not be deemed to EXCLUDE other things otherwise within the meaning of the term defined?
_________________________________________________
September 11, 2014 at 4:41 PM

Dear Professor Siegel,

As stated on this linked page:
_____________________________________________
Federal Reserve Notes (FRNs)
—————————————————————–
https://wikipediaint.wordpress.com/2014/08/24/federal-reserve-notes-frns/
_____________________________________________
Federal Reserve Notes are not dollars
………………………………………………..
Russell L. Munk

Assistant General Counsel

Department of the Treasury

February 18, 1977
——————————————————————
What is a dollar ?

It’s just something artificial we throw out there

What you’re doing is

you’re fooling people

into thinking

they have purchasing power,

when in fact

they do not
………………………………………………..
Denis Karnofsky

Chief Economic Officer

St. Louis

St. Louis Federal Reserve Bank

June 10, 1978
——————————————————————
The term

dollars

likewise is incorrect,

which,

according to constitutional definition,

are monetary units,

used in exchange,

backed by gold and silver

Our present day fiat issues

are supported by

more printed paper of the same;

therefore, they are correctly termed

Federal Reserve Notes (FRN),

not dollars
………………………………………………..
Robert P. Vichas

Handbook of Financial Mathematics, Formulas, and Tables

page 420

(1979)
——————————————————————
Ballentines Law Dictionary,

3rd Edition:

Dollar.

The legal currency of the United States;

State v. Downs,

148 Ind 324, 327;

the unit of money consisting of one hundred cents

The aggregate of specific coins which add up to one dollar

36 Am J 1st Money
8

In the absence of qualifying words, it cannot mean promissory notes, bonds, or other evidences of debt

36 AM J 1st Money
8
——————————————————————
Used to read;
………………………………………………..
THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE, AND IS REDEEMABLE INLAWFUL MONEY AT THE UNITED STATES TREASURY, OR AT ANY FEDERAL RESERVE BANK
——————————————————————
Now reads:
………………………………………………..
FEDERAL RESERVE NOTE

THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE
——————————————————————
U.S. Code › Title 18 › Part I › Chapter 1 › § 8
——————————————————————
TITLE 18 – CRIMES AND CRIMINAL PROCEDURE
——————————————————————
18 U.S. Code § 8 – Obligation or other security of the United States defined
——————————————————————
The term “obligation or other security of the United States” includes all bonds, certificates of indebtedness, national bank currency, Federal Reserve notes, Federal Reserve bank notes, coupons, United States notes, Treasury notes, gold certificates, silver certificates, fractional notes, certificates of deposit, bills, checks, or drafts for money, drawn by or upon authorized officers of the United States, stamps and other representatives of value, of whatever denomination, issued under any Act of Congress, and canceled United States stamps.
………………………………………………..
http://www.law.cornell.edu/uscode/text/18/8
——————————————————————
Federal Reserve Notes are backed by the assets of the Federal Reserve Banks, which serve as collateral under

These assets are generally Treasury securities which have been purchased by the Federal Reserve through its Federal Open Market Committee in a process called debt monetizing

This monetized debt can increase the money supply, either with the issuance of new Federal Reserve Notes or with the creation of debt money
——————————————————————
http://en.m.wikipedia.org/wiki/Federal_Reserve_Note
_________________________________________________
September 11, 2014 at 3:24 PM

I’m sorry, but your assertions are incorrect

* Ordinary Americans are included in the term

person

If you simply read the definition of

person

to which you link, you will see that it

includes

an individual

An ordinary American is

an individual

The relevant dictionary definition of

individual

is

a single human being as contrasted with a social group or institution

An ordinary American is a single human being

* As to the definition of

United States,”

your fallacy, once again, is imagining that the term

includes

is restrictive

This was explained in my previous message

When the code says that the term

states

includes

the District of Columbia,

that does not exclude

the states

Section 7701 makes this clear

In the end, what matters is not what you or I think about this, but what the courts think

These kinds of arguments have been to court hundreds of times and the courts have ruled against the kinds of arguments you are making every time

For a couple of cases about the meaning of

person,”

please see here

Here’s a question for you:

why do you believe this stuff?

That is a serious question — I would really like to know

Every federal judge,

every law professor,

and

99.999% of all lawyers

will tell you that these

tax protester arguments

are complete nonsense

Why are you more willing to believe some anonymous kook with a webpage

(who just calls himself “hughareyou”)

than you are to believe the entire community of trained experts, including myself?

I would really like to know

Jon Siegel
_____________________________________________
September 11, 2014 at 9:33 PM

Dear Professor Siegel,

Why would I trust

Every federal judge,

every law professor,

and

99.999% of all lawyers ?

Did they spend over 10 years researching the IRS and tax laws at the Southern Methodist University Underwood Law Library and the Dallas Library, reading books on the subject, researching online, researching the Administrative Procedures Act (APA), Internal Revenue Codes from the 1800’s onward, IRS Statement of Organization and Functions in the Internal Revenue Bulletins and Federal Register, Congressional Record, Paperwork Reduction Act, etc.

Did they compile research on the words “include” and “includes” as used in the United States Code titles?
_____________________________________________
Include(s) defined
—————————————————————–
https://wikipediaint.wordpress.com/2014/09/03/includes/
_____________________________________________
Why should I trust your definition of “includes?
_____________________________________________
U.S. Code › Title 1 › Chapter 1 › § 1
——————————————————————
TITLE 1 – GENERAL PROVISIONS
——————————————————————
1 U.S. Code § 1 – Words denoting number, gender, and so forth
——————————————————————
the words

insane

and

INSANE PERSON

shall

INCLUDE

every …

INSANE PERSON,

and …
_____________________________________________
Your definition is the fallacy when the above definition of “includes” is considered:

An

INSANE PERSON” shall INCLUDE every …
INSANE PERSON,

and that’s just

INSANE“, Jon
_____________________________________________
September 11, 2014 at 7:46 PM

If you really believe that Federal Reserve Notes are not dollars, or have no purchasing power, or are just evidence of debt, or have anything else wrong with them, send them to me

If you don’t like your Federal Reserve Notes, I’m happy to take them off your hands

Don’t send me any more comments about how terrible and worthless FRNs are

Just send me the FRNs
_________________________________________________
September 12, 2014 at 7:42 AM

Dear Professor Siegel,

I cannot force you to believe what Russell L. Munk, Assistant General Counsel, Department of the Treasury, said

However, my understanding is that members of the American Bar Association still accept FRN’s for representation in the Admiralty (Maritime) Jurisdiction courts, so they may come in handy, even though I appreciate your suggestion !
………………………………………………..
http://home.absolute.net/xode/nwofraud/Bankruptcy_fraud/Bankfraud1.htm
_________________________________________________
September 12, 2014 at 8:00 AM

Yes, lawyers accept FRNs

So do grocery stores, clothing stores, landlords, newsstands, doctors, barbers, carpenters, bricklayers, and just about everybody else

They can be exchanged for pretty much any kind of goods or services

Which is to say, they are money

Actions speak louder than words

You had a lot of bad things to say about FRNs, but when I offered to take yours off your hands, you didn’t send them to me

That proves you regard them as valuable

I win on this one

Jon Siegel
_________________________________________________
September 12.2014 at 6:43 PM

Unfortunately, you forget the Donald Sterling maxim:

I live in a culture …. “

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