Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

_____________________________________________
http://home.hiwaay.net/%7Ebecraft/1099OID.html
_____________________________________________
The Kennedy 1099-OID Program

(Updated 7-27-2010)
………………………………………………..
SEE
_________________________________________________
What is this 1099-OID? (Original Issue Discount)
——————————————————————
http://stopthepirates.blogspot.com/2012/06/what-is-this-1099-oid.html?m=1
_________________________________________________
1099 OID (Original Issue Discount)
——————————————————————
http://stopthepirates.blogspot.com/2014/03/1099-oid.html?m=1
_________________________________________________
Back in

January, 2008,

both

Tom Cryer

and

I

heard about the

promotion

of the

1099-OID

argument

by

Dr. Sam Kennedy
………………………………………………..
We immediately wondered

“who is ‘Dr. Sam Kennedy’”?
………………………………………………..
Both of us still would like to know who he is:
_____________________________________________
Is Dr Sam Kennedy A White Ant?
—————————————————————–
http://loveforlife.com.au/content/08/08/13/dr-sam-kennedy-white-ant-fraud-scamster
_____________________________________________
Nu Moorish Science Temple
—————————————————————–
http://mstofaecofkmirno9.blogspot.com/2009/10/response-on-nana-aka-lisas.html?m=1
………………………………………………..
Blog not found

Sorry, the blog you were looking for does not exist

However, the name mstofaecofkmirno9 is available to register!
_____________________________________________
What shocked both

Tom

and

me

was the

promotion

of the

1099-OID

argument
………………………………………………..
This

argument

is nothing but another

extension

of the

flaky ideas

of that

car-thief,

Roger Elvick
………………………………………………..
Here is

Tom’s explanation

of this

1099-OID

process

that was contained in one of his e-mails:
………………………………………………..
What about the

1099 OID,

then?
………………………………………………..
Is there any

basis in law

for the

claim

that a

1099 OID form

can be

used

as a

form of payment

or

offset for a debt?
………………………………………………..
Let me take you on a

lawyer’s investigation,

the way we

research

any

question

to

determine

whether there is any

basis

for a

proposition
………………………………………………..
Let’s start out by remembering that the

federal system

is a

civil law system
………………………………………………..
If

Congress

didn’t

enact it

then it isn’t

law
………………………………………………..
So, let’s search the

U.S.C.

and the

Statutes at Large

for

1099 OID
………………………………………………..
Our result?
………………………………………………..
Zip

Nada

Nichts
………………………………………………..
Not one single reference to

1099 OID,

much less

legal authorization

to use it to

offset

or

pay a debt with
………………………………………………..
What, then, about

regulations?
………………………………………………..
The

Treasurer

has the

authority

to

promulgate regulations

and

designate forms

and maybe some other

cabinet department

can dovetail off the

Treasury regs,

so let’s

search

the

CFR,

all of it, for

1099 OID
………………………………………………..
We get

two hits

and

two hits only:
………………………………………………..
26 CFR 1.6049-1
_____________________________________________
› Title 26 › Chapter I › Subchapter A › Part 1 › Section 1.6049-1

26 CFR 1.6049-1 – Returns of information as to interest paid in calendar years before 1983 and original issue discount includible in gross income for calendar years before 1983
—————————————————————–
http://www.law.cornell.edu/cfr/text/26/1.6049-1
—————————————————————–
http://www.gpo.gov/fdsys/pkg/CFR-2012-title26-vol13/pdf/CFR-2012-title26-vol13-chapI.pdf
_____________________________________________
and
………………………………………………..
26 CFR 1.6049-3
_____________________________________________
CFR › Title 26 › Chapter I › Subchapter A › Part 1 › Section 1.6049-3

26 CFR 1.6049-3 – Statements to recipients of interest payments and holders of obligations to which there is attributed original issue discount in calendar years before 1983
—————————————————————–
http://www.law.cornell.edu/cfr/text/26/1.6049-3
—————————————————————–
http://www.gpo.gov/fdsys/pkg/CFR-2012-title26-vol13/pdf/CFR-2012-title26-vol13-chapI.pdf
_____________________________________________
(see attached)
………………………………………………..
These

regulations

designate

the

1099 OID form

as the

proper form

for a

corporation

to use in

reporting discounted interest

on an

original issue discount

debenture,

bond,

etc.
………………………………………………..
Its use is

limited

to

corporations

and

corporations only
………………………………………………..
I’m not a

corporation,

I’m a

corpus,

a

living,

breathing

and

real human being,

a

body,

not an

embodiment

by

charter of the state
………………………………………………..
So

1099 OIDs

have nothing to do with

me

unless a

corporation

issues one to

me

because I am the

holder

of an

original issue discount

bond

as specified in the

two regulations
………………………………………………..
Once you read the

two regulations

you can see exactly what a

1099 OID

really is
………………………………………………..
It is a way for

corporations

to tattle on

bond holders

for

interest

they

never received

as they don’t receive it
………………………………………………..
Confusing?
………………………………………………..
The

1099 OID

applies to

corporate issues

of

bonds,

debentures,

notes

or

other evidences of indebtedness

that are

issued

at a

discount

instead of issued for

face value
………………………………………………..
When a

company

borrows money

by

issuing bonds

it can do it a number of different ways
………………………………………………..
One, it can

sell

a

bond

at

face value

and

pay interest

on a

monthly,

quarterly

or

annual

basis

until the

bond

is

redeemed

for

face value

plus any

additional interest

accrued

since the

last payment
………………………………………………..
Another way, though, is to

issue the bond

for less than its

face value,

discounting

the

interest

from the

sale price

instead of

paying

it out during the

life

of the

bond
………………………………………………..
The

bond

starts out at the

sale price

and

grows up

to its

face value

during its

term
………………………………………………..
A

good example

that most of us are

familiar with

is a

U.S. Savings Bond
………………………………………………..
When you

purchase

a

$100 savings bond

you don’t

pay

$100

for it

You pay a good bit less
………………………………………………..
Those

bonds

are

sold

for an

amount

which, when

interest

is

added

over the

ten year period,

would have a

future value

of

$100

at

ten years

(or whatever the life of the bond is)
………………………………………………..
Although

interest

on

U.S. Savings Bonds

is

exempt,

interest

from

corporate bonds

is

not exempt
………………………………………………..
So, when that

unpaid interest,

which was, instead,

discounted

from the

face value

at

time of issue,

accrues,

increasing

the

redemption value

of the

bond

by some

increment

each

year,

the

government

wants it’s

cut now,

not at maturity
………………………………………………..
So it requires

corporations

who have any

original issue discount

method of interest

payment

to report that

accrued value

or

interest

as

earnings

even though it was

never actually paid

or

received
………………………………………………..
The

form

to

use

for that is a

1099 OID

(original issue discount)
………………………………………………..
If the

bond

were

sold

at

face value

and

interest

actually

paid out

each

year,

then they would have to

report that,

too,

but on a

different version of 1099
………………………………………………..
But what isn’t in those

two sections

is any way anyone other than a

corporation

can issue a

1099 OID

and what else isn’t in there is any way to use a

1099 OID

as a

form of payment

or

offset of a debt
………………………………………………..
It’s tedious reading and you’ll probably drop off to sleep a few times before you get to the end, but it isn’t there
………………………………………………..
So now we know there is no basis for using a

1099 OID

for

payment

or

offset

in the

statutory law

and we know there is

no basis

in

federal regulations,

either
………………………………………………..
So far there is

no basis found,

making the notion . . . well . . . baseless
………………………………………………..
What, then, about

case law?
………………………………………………..
Where the

law is silent,

where there is a

hiatus in the law,

the

courts

can resort to

equity
………………………………………………..
So at least theoretically the

courts

could recognize a

1099 OID

as a

form of payment
………………………………………………..
What do the

courts

have to say?
………………………………………………..
Well, let’s do a

search

of

all federal courts

for

1099 OID

and see what we get, and lo and behold and harken all ye within hail!!!
………………………………………………..
We get

four whole hits
………………………………………………..
Four cases

dealing

with the

1099 OID

(see attached)
………………………………………………..
Let’s roll our sleeves up and dig in
………………………………………………..
The first one is a

bankruptcy court ruling,

Harrison
………………………………………………..
I don’t subscribe to

bankruptcy cases

because I don’t do those, so we don’t have the full text of the

case
………………………………………………..
But the

summary

let’s us know that the

1099 OID,

along with the

$3 million

Registered-Discharging and Indemnity Bond

drawn on Harrison’s

account

with the

Department of Treasury

was not

accepted for value

and that

Mr. Harrison

has been moved from the

waiting for a discharge in bankruptcy line

to the

waiting for his cell assignment line
………………………………………………..
Nope, no help there
………………………………………………..
The

second case,

Neal,

is really entertaining
………………………………………………..
Mr. and Mrs. Neal

and their

conglomeration

of

trusts

and

foundations

were

defendants

in a

federal foreclosure action
………………………………………………..
The

Neals

sent

notice

of a

” bonded promissory note ”

purporting to

evidence

a

loan

to the

court,

the

attorney for the government

and the

clerk of court

in the

amount

of

$50,000,000

(I thought it was $25,000,000–wait, Mr. AND Mrs., so it’s $25,000,000 each!)

accompanied by a

2008 1099 OID

showing

$50,000,000

withheld

from the

loan proceeds

for

taxes
………………………………………………..
We

loaned

you

$50,000,000

but we’ve

withheld

100%

of the

proceeds

of the

loan,

which

isn’t taxable,

for

taxes
………………………………………………..
(I wonder if they paid in the withheld funds, and if they didn’t . . . whooee!

They’re in some Dutch, now!)
………………………………………………..
But wait, it gets better
………………………………………………..
The

court

also received by mail a

notice

from a

notary

(who was stupid enough to put her name on the document)

notifying the

court

of its

non-performance

on the

bonded promissory note
………………………………………………..
This is definitely some

alternative law

if I’ve ever seen it
………………………………………………..
Remember, a

1099 OID

is

issued

by the

BORROWER,

the

corporation

issuing

the

bond,

etc.,

to the

LENDER,

but in this

case

two people,

not

corporations,

are

claiming

to be the

LENDER

and

issuing

the

1099 OID

to the

purported BORROWER
………………………………………………..
Alternative, indeed
………………………………………………..
But the

court

didn’t order

payment

of the

note
………………………………………………..
Instead it

referred

the

matter

to the

DOJ

for

prosecution

for

mail fraud,

tax fraud

and

obstruction
………………………………………………..
The

Neals

(and their notary)

don’t need to worry about the

foreclosure

because they probably won’t need that

house

for some time, anyway
………………………………………………..
I think we can count this

case

as not providing any

legal basis

for similar use of the

1099 OID
………………………………………………..
Now, the

third,

Mr. Martineau,

was already in

jail,

so at least he didn’t have to pack
………………………………………………..
He

filed

a

civil rights action,

pro se,

and

attempted

to

pay

the

filing fee

with a

1099 OID
………………………………………………..
Didn’t work there, either
………………………………………………..
Still no basis
………………………………………………..
How about the

fourth case,

Microdot?
………………………………………………..
Well, that one deals with a

corporation

that

issued debentures

in

exchange for stock

but at an

original issue discount
………………………………………………..
This

case

doesn’t deal with the

“alternative”

application

of the

form,

so

no basis here,

either
………………………………………………..
Now, we’ve exhausted all

law
………………………………………………..
The

Code,

the

Statutes at Large,

all

regulations

and

case law
………………………………………………..
There is

no basis

for the use of a

form 1099 OID

by anyone other than a

corporation

issuing bonds

and such at

original issue discount
………………………………………………..
And there is

no legal basis

for anyone,

not even a

corporation,

using a

1099 OID

as a

form of payment
………………………………………………..
If there were any

legal basis

we would have found it
………………………………………………..
These folks have the inane idea that they can

invent law

(which is convenient, since they want to claim some proprietary interest in their ” discovery “)
………………………………………………..
Law

isn’t invented,

it’s enacted,

and none of us can merely

issue proclamations,

making

new law,

although if that were true it would allow for some pretty interesting arguments
………………………………………………..
This reminds me of the series M.A.S.H. where Hawkeye and his buddy played a game called

” Triple Cranko ”
………………………………………………..
It was played with a

chess board,

chess pieces,

checkers

and a

deck of cards

and there were

no rules
………………………………………………..
Someone with some

comic talent

could probably build a

pretty funny skit

involving a couple of

lawyers

arguing before a

judge,

all three just making up

laws

as they go
………………………………………………..
As for the other component, the

” $25,000,000 bonded promissory note “,

stop and think about that for a minute
………………………………………………..
In the

current myth

the

note

is

issued

by the

debtor

but purports to

evidence

a

debt owed

by the

creditor,

who never signed it
………………………………………………..
” Well, you want me to

pay

my

car note?
………………………………………………..
Check this out, sucker!!
………………………………………………..
I’m writing a

note

for

twice that amount

from the

bank

to

me!
………………………………………………..
Now give me

my change

and make it

snappy

or I’ll write another

note

for

triple

what I

owe

the

bank”
………………………………………………..
Double Cranko

at the very least
………………………………………………..
I can’t

write

and

issue a note

that makes anyone

liable

but

me
………………………………………………..
And who is

bonding it?
………………………………………………..
If this

note

is

bonded

there is an

insurance company

or

bank

that is

certifying

that it has the

money

to

pay the note off

and if the

note

is

dishonored

it will turn that

money

over to the

creditor
………………………………………………..
Who bonds these notes?
………………………………………………..
A

bond,

a

promise to pay the debt

or

meet the obligation of another

must be in writing
………………………………………………..
Where is the

writing?
………………………………………………..
Where is the

bond?
………………………………………………..
Who signed it?
………………………………………………..
Where is the

money

backing it up?
………………………………………………..
All of this is as bogus as it gets
………………………………………………..
The saddest part, though, is that

people

are eating it up and it’s

getting them in trouble
………………………………………………..
Hope this sheds at least some light
………………………………………………..
Both

Tom

and

I

immediately tried to

warn people

that following the

Dr. Sam Kennedy

program

was a good way to

“break into jail”
………………………………………………..
Of course,

promoters

of

scams

defend themselves

with

defamation

of their

accusers
………………………………………………..
But now, the

chickens are coming home to roost
………………………………………………..
In

September, 2009,

I heard about the

case

of

Seth Sundberg,

a

man

from

California

who had used the

1099-OID

process
………………………………………………..
A

criminal complaint

was

filed

against him by the

feds

on

September, 1, 2009
………………………………………………..
He was

arrested

and

denied bond
………………………………………………..
An

indictment

was later

returned

against him,

and he

filed

the

following pleadings,

among others:
_____________________________________________
Docket sheetimageimageimageimageimageimageimageimageimageimageimageimagehttp://home.hiwaay.net/%7Ebecraft/Sunddocketsheet.pdf
_____________________________________________
Sundberg Indictmentimage

image

image

image

image

image

image

image

image
http://home.hiwaay.net/%7Ebecraft/SundbergIndictment.pdf
_____________________________________________
Doc. 35
image

image

image

image

image

image

image

image

image

image
http://home.hiwaay.net/%7Ebecraft/Doc35.pdf
_____________________________________________
Doc. 37image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc37.pdf
_____________________________________________
Doc. 40image

image

image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc40.pdf
_____________________________________________
Doc. 41image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc41.pdf
_____________________________________________
Doc. 42image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc42.pdf
_____________________________________________
In

January,

Sundberg

plead guilty
………………………………………………..
He has

filed

the following

since then:
_____________________________________________
Doc. 56image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc56.pdf
_____________________________________________
Doc. 58image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc58.pdf
_____________________________________________
Doc. 60image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc60.pdf
_____________________________________________
Doc 63image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc63Acceptance.pdf
_____________________________________________
Doc. 62image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc62.pdf
_____________________________________________
Doc. 64image

image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Doc64.pdf
_____________________________________________
The

prosecution’s sentencing brief

is

Doc. 64;

it asked that

Sundberg

be

jailed

for

71 months
………………………………………………..
On

July 22, 2010,

Sundberg

was
_____________________________________________
sentenced to 71 months,imagehttp://home.hiwaay.net/%7Ebecraft/Doc71sentence.pdf
_____________________________________________
given a

100,000 bux fine,

and

ordered

to

pay restitution

of

almost 2.5 million
………………………………………………..
These

gurus

work for the

prosecution

and have a

better track record

than the

prosecutors:

they have a

100% conviction rate
………………………………………………..
Furthermore, a

man

named

Armstrong

from

Colorado

followed the

advice

of

Dr. Sam Kennedy

and submitted

1099-OID tax returns

to get

huge refunds
………………………………………………..
The

U.S. Attorney

in response

filed

a
_____________________________________________
criminal complaintimage

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/armstrongcomplaint.pdf
_____________________________________________
against him

followed by an
_____________________________________________
indictmentimage

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/Armstrongindictment.pdf
_____________________________________________
Please read these documents
………………………………………………..
If there is a

trial,

the

defense

should be

Dr. Sam Kennedy lied to me
………………………………………………..
The

DoJ

has

filed

and

posted

on its

website

certain

civil complaints

filed

against

return preparers

who were using this

process:
_____________________________________________
Complaint against Teresa Martyimage

image

image

image

image

image

image

image

image

image

image

image

imagehttp://www.justice.gov/tax/TMarty_Complaint_Temp_Case_Num.pdf
_____________________________________________
Complaint against McIntyreimage

image

image

image

image

image

image

image

image

image

image

image

image

image

image

image

imagehttp://www.justice.gov/sites/default/files/opa/legacy/2009/09/28/usa-v-nyla-mcintyre.pdf
_____________________________________________
Here are some

Department of Justice
_____________________________________________
news releases
—————————————————————–
http://www.justice.gov/opa/pr/government-files-seven-lawsuits-nationwide-block-alleged-scheme-involving-fraudulent-tax
_____________________________________________
about

civil

and

criminal prosecutions

of

people

who used the

Dr. Kennedy

1099-OID

program
………………………………………………..
Here is another
_____________________________________________
indictmentimage

image

image

image

image

image

image

image

image

image

image

image

image

image

image

imagehttp://home.hiwaay.net/%7Ebecraft/BrekkeIndictment.pdf
_____________________________________________
for using the

1099-OID

process
………………………………………………..
The

gurus

who

promoted

this

garbage

need to be

impaled
………………………………………………..
Please, stay away from any

1099-OID

scheme,

redemption process,

etc.
………………………………………………..
These insane ideas created by

guru/crackpots

will get

you

into trouble
_____________________________________________
Lowell (Larry) H. Becraft, Jr.
Huntsville, Alabama
—————————————————————–
http://fly.hiwaay.net/~becraft/deadissues.htm
_____________________________________________
Articles
—————————————————————–
https://wikipediaint.wordpress.com/about
_____________________________________________

Advertisements