Is the IRS an 'ad hoc' operation?

> From: Allyson Smith <albosdo@yahoo.com>
> Subject: Text of USA Today Ad re Income Tax Withholding
>
>
> http://www.worldnetdaily.com/news/we_the_people.asp
> Dear We The People
> Q. WHAT DO THESE MEN HAVE IN COMMON?
> David Bosset
> Bosset Marketing Partners, Inc. (Florida)
> Nick Jesson
> No Time Delay Electronics, Inc. (California)
> Dick Simkanin
> Arrow Custom Plastics, Inc. (Texas)
> Al Thompson
> Cencal Aviation Products, Inc. (California)
> Leonard Roberto
> Batavia Enclosures, Inc. (New York)
> A. THEY ARE ALL EMPLOYERS WHO HAVE STOPPED WITHHOLDING
> TAXES FROM THEIR WORKERS' PAYCHECKS
> They are part of a growing number of employers and
> workers who believe that:
> THERE IS NO LAW THAT REQUIRES WORKERS, AS U.S.
> CITIZENS EARNING THEIR MONEY FROM DOMESTIC COMPANIES,
> TO PAY INCOME OR EMPLOYMENT TAXES; NOR TO HAVE THOSE
> TAXES WITHHELD;
> THE 16TH AMENDMENT (THE "INCOME TAX AMENDMENT") WAS
> FRAUDULENTLY DECLARED TO BE RATIFIED BY THE SECRETARY
> OF STATE IN 1913.*
> Each of the employers has come to these conclusions
> with the aid of Certified Public Accountants,
> attorneys and/or tax researchers. In 1999, upon
> consultation with tax researcher Thurston Bell, David
> Bosset, a former tax consultant himself, submitted a
> nine page legal memorandum to the IRS, arguing that he
> had erred in 1996 and 1997 in filing 528 W-2s and
> 1099s, which reported that workers had earned taxable
> income. Attached were 528 W-2s and 1099s, corrected to
> "0."
> The local IRS office passed the matter up to the
> Conflict Resolution Branch, which determined that Mr.
> Bosset was correct. The IRS returned the money that
> Mr. Bosset had withheld from the paychecks of his
> employees. Soon after, other employers around the
> country stopped withholding, including those
> identified above.
> Each employer has respectfully presented these
> arguments to the IRS (and to their representatives in
> Congress), asking the government to review the results
> of their research and to show them if they are
> mistaken. The IRS DID NOT RESPOND, nor did the others.
>
> IRS SUDDENLY THREATENS "CRACKDOWN"
> The IRS on February 10th made public announcements
> that it would soon conduct a crackdown on dozens of
> employers who have stopped withholding taxes from the
> money they pay their workers. The announcement
> apparently was spurred on by articles in the New York
> Times in November that called the employers "tax
> cheats" and warned that the trend could spread and
> cause the tax system to collapse.
> The Times quoted IRS Deputy Commissioner Dale Hart as
> saying that the employers' legal rationale is
> frivolous, has no legal authority, and has been
> thoroughly rejected by the courts. The employers, of
> course, do not see their arguments as frivolous, and
> are unaware of any court case that has addressed or
> rejected them. Hart did not offer any code section
> that would apply
> The employers all followed IRS administrative
> procedures and cite chapter and verse of the laws and
> regulations that allow them to stop withholding. The
> IRS, after due consideration, refunded money the
> employers had withheld from the paychecks of their
> employees. This was not the result of a low-level
> clerical error, but was based on numerous exchanges
> through the IRS's Problem Resolution program.
> At least one of the employers named in the Times
> article has written a letter to the IRS Commissioner
> requesting a meeting to discuss the matter. Excerpts
> from that letter are printed below.
> Nick Jesson's (NTD Electronics') demand for dialogue
> was UNANSWERED by the IRS, so he is now going public.
> The IRS's failure to respond follows a series of
> attempts to get government officials, including the
> IRS, Congress and the White House, to participate in
> conferences to publicly explain findings and refute
> allegations by numerous tax researchers and former IRS
> agents such as the allegations made at the top of this
> message.
> Tax researchers recognize that the actions of the
> employers are supported by provisions in the Tax Code.
> For example: A withholding agent is only required to
> withhold from foreigners (Code Sections 7701, 1461,
> 1441-3). Tax researchers have noted for years that a
> statement of citizenship given to an
> employer/withholding agent precludes the withholding
> of tax, as there is no authority in the Code to
> withhold money from a citizen or resident of the U.S.
> unless that person authorizes it. If the worker
> submits a statement of citizenship, the employer, as a
> withholding agent, is relieved of duty to withhold
> income taxes, since those apply to nonresident aliens.
> See our web site.
> Tax researchers have asserted there is no law that a
> U.S. citizen must have a social security number (SSN)
> or that an employer must have an employer
> identification number (EIN), or that either of them
> must participate in the social security program (
> i.e., employment or FICA taxes under Subtitle C). An
> employer who does participate in the social security
> program is required to give a W-4 form to a worker,
> but is not required to get it back, and the worker is
> not required to fill it out and return it, unless that
> worker wants to participate in the social security
> program. Absent a W-4 signed by the worker, an
> employer is not authorized by law to withhold and
> submit to the IRS money from the worker for employment
> taxes. Further, a person without a SSN number would
> have no taxable income. All this has been
> well-documented and verified by numerous letters from
> any number of Social Security Administration
> officials. You can check these out on our web site
> (see below).
> Section 1441(a) and (b) state that interest,
> dividends, rent, salaries, wages, profits, etc., are
> "income" when received on behalf of, or paid to, a
> nonresident alien or other foreign entity. And courts
> have ruled that profits of corporations are "income."
> But there is no provision in the Code stating that
> receipts of citizens or residents of the country are
> "income." Thus, a citizen's own receipts are not
> "gross income" and are not, therefore, "taxable
> income" under the Code. Income refers to property
> derived from activity involving the exercise of a
> government-granted privilege.
> Section 61 of the Code has the definition of gross
> income as "all income from whatever source derived,"
> and then a list of 15 "items." Tax researchers have
> recognized that the "items" listed are not the same as
> "sources" of income that are taxable. The sources are
> actually to be found in a more remote part of the Code
> at Section 861 (or section 1.861-8(f)(1) of the
> regulations). They consist of five "foreign" sources.
> In previous versions of the Code, the relationship and
> distinction between the "items" and the "sources" was=
> not disguised or separated by distance in the Code.
> This part of the Code is an important aspect of the
> position taken by the employers who have stopped
> withholding. For more details, see "Connecting the
> Dots" on our web site, and especially go to
> www.Taxableincome.net for a free download= of Larken
> Rose's excellent book and/or refer to appropriate
> chapters of Chris Hansen's opus magnus at
> http://familyguardian.tzo.com/Publications/GreatIRSHoax.htm,
> also a free download.
> DEAR IRS : WHY DON'T YOU ANSWER? AN EMPLOYER'S LETTER.
>
>
>
> ----------------------------------------------------------------------------= ----
>
> Charles O. Rossotti, Commissioner
> Internal Revenue Service
> 1111 Constitution Avenue NW
> Washington, D.C. 20224
> Dear Commissioner Rossotti:
> I am writing to you because I have reason to believe
> that certain offices within the Internal Revenue
> Service are seeking unwarranted criminal charges both
> against Nick Jesson of No Time Delay Electronics for
> tax evasion and against myself as Founder and
> Executive Researcher of the National Institute for
> Taxation Education (NITE) for conspiracy to evade
> taxes.
> Both Mr. Jesson and I were given this impression by an
> article that appeared in the February 10 edition of
> the New York Times ("I.R.S. Going After Businesses on
> Withholding Tax"), in which reporter David Cay
> Johnston refers to Mr. Jesson twice, in the context of
> quotes by IRS officials such as CID Chief Mark E.
> Matthews and Deputy Commissioner Dale Hart. Each of
> these officials stated that efforts are being made
> within the IRS to tighten enforcement, and Chief
> Matthews told the Times that "some of the business
> owners, as well as the promoters who advise them, will
> be prosecuted for tax evasion and other crimes."
> I wish for you to know the facts of this issue so that
> you can understand that in my work with Mr. Jesson, we
> have sought complete compliance with all of the
> Internal Revenue laws as stated in the U.S. Code, the
> Treasury Regulations, and the Internal Revenue Manual.
> Furthermore, it has always been our intent to correct
> any mistakes of law or fact that we have made and
> distributed to any interested parties, as we have
> engaged in the IRS' administrative process in order to
> exhaust all administrative remedy and avail ourselves
> of any subsequent judicial hearing of our legal
> arguments if necessary.
> However, to date the IRS has given us no reason to
> believe through Mr. Jesson's correspondences with the
> agency that Mr. Jesson or I have misunderstood,
> misrepresented, or failed to comply with the law in
> any way. We have made every effort to comply with the
> law and the IRS procedures that we must exhaust before
> seeking adjudication of claims. Since the IRS has
> effectively accepted as correct and truthful NITE's
> arguments as applied by Mr. Jesson, any attempt to
> prosecute either myself or Mr. Jesson would not only
> be outside of the scope of the law but also a clear
> abuse of government power.
> NITE is an educational organization operating under
> the protection of the First Amendment guaranty of
> freedom of speech and freedom of association=85 Since
> 1997 NITE has been distributing information regarding
> the Internal Revenue laws and assisting its members in
> complying with the letter of the law and discovering
> the long-obfuscated IRS administrative procedures,
> which are binding upon the IRS as well as the
> Citizens.
> In the case of Mr. Jesson NITE provided to him
> information regarding the U.S. Source Rules as set
> forth in the Internal Revenue laws and the process of
> correcting prior claims made to the IRS regarding
> "gross income" paid and reported to the IRS. These are
> the pertinent facts of Mr. Jesson's case:
> On May 10, 2000, following information researched and
> published by NITE, Mr. Jesson amended the 1997 returns
> for No Time Delay Electronics, Inc. by filing Forms
> 941C, W-2C and W-3C reflecting gross income of "0",
> based on the "source" rules as defined by the Treasury
> Regulations. These returns were submitted pursuant to
> 26 C.F.R. =A7301.6402-2, complying with the only
> administrative process available to an employer
> seeking a Refund of overpayment of taxes. Had he
> failed to take this specific action he would be unable
> to seek any other remedy in the courts before
> exhausting this administrative remedy.
> On June 1, 2000 Mr. Jesson received a response letter
> from the IRS stating that the agency needed more time
> to review his case before making a decision on his
> Claim for Refund. The letter stated that no further
> information would be required of him at that time
> while the review was under way.
> On July 11, 2000 the IRS completed review of Mr.
> Jesson's case and issued four Refund checks in the
> amounts of $68,244.94, $61,262.01, $37,373.74, and
> $48,573.87. These checks were refunds for employment
> taxes that were withheld for each quarter of 1997.
> Since receiving the refund checks, Mr. Jesson has
> received no further correspondences from the IRS of
> any kind, especially none stating that the refund was
> issued mistakenly.
> On November 19, 2000 the New York Times printed an
> article authored by David Cay Johnston, which referred
> to Mr. Jesson (not by name but as owner of NTD
> Electronics) in the context of tax cheats who are
> evading the taxes owed.
> Prior to the publication of the article I had a brief
> conversation with Mr. Johnston, during which I
> attempted to correct his misconception of the
> substance of my work. Though there was some reference
> made to my work through mention of NTD Electronics,
> there was no specific mention of myself or of NITE
> (www.nite.org) being the source of this effort by=
> employers to apply the U.S. Source Rules to their
> determinations of wages and gross income reported to
> the IRS.
> [Editor's note]=85The letter goes on to note
> inaccuracies in the Times stories by David Cay
> Johnston and his failure to take telephone calls from
> Mr. Jesson or to return them. The letter notes the
> article of February 10 juxtaposed statements about Mr.
> Jesson with statements by IRS officials who said that
> business owners are "scamming their employees" and
> will be prosecuted for evasion. The article stated
> that those who promote tax strategies for businesses
> will also be prosecuted. The letter continues=85
>
> I understand that the IRS should not be held
> responsible for the words that Mr. Johnston chooses to
> write and the New York Times chooses to publish. I
> recognize the possibility that the IRS may have given
> Mr. Johnston wholly accurate information and that the
> blame for the accusatory language lies wholly upon Mr.
> Johnston and the New York Times. And it is with this
> good faith that I reach out to the IRS to bring the
> IRS, NITE and Mr. Jesson into an exclusive and
> legitimate face-to-face conversation regarding any
> misunderstandings or errors of law that NITE or Mr.
> Jesson are holding and availing to the public.
> We propose that the IRS, represented by you and/or
> your delegates, engage NITE in a public forum and
> discuss the legality and legitimacy of the positions
> that NITE proffers. At this meeting, we expect that
> the IRS will either provide pertinent case law from a
> court of competent jurisdiction that does not ignore
> the fact that the U.S. Source Rules apply to U.S.
> Citizens, or failing that will admit publicly that
> NITE's specific argument of law is correct and
> therefore no criminal or civil actions will be brought
> against any individual Citizen who proffers NITE's
> specific argument. At this meeting you and your
> delegates would have the opportunity to refute our
> argument and we would have an opportunity to engage in
> a dialogue with our government regarding our
> application of the whole of the Internal Revenue laws
> and most specifically our application of the U.S.
> Source Rules to U.S. Citizens.
> [Editor's note]=85The letter says that Mr. Bell and Mr.
> Jesson are prepared to meet for the discussion at any
> time and place that will allow for an audience of
> members of the media and other concerned citizens, and
> that it would be desirable to have representatives of
> the Justice Department there to save the need for any
> follow-up meetings with them. Mr. Bell states that the
> position used by Mr. Jesson has never been argued or
> decided in federal court, and that so far, no
> government official has attempted to refute the
> specific arguments on which it is based. He continues=85
>
>
> This letter is being sent to you directly since your
> delegates have made the naked threats of prosecution
> as contained in the David Cay Johnston article.
> If the intent of your subordinates' comments to David
> Cay Johnston was to intimidate and threaten
> law-abiding citizens and employers, then the
> Restructuring and Reform Act of 1998 has indeed failed
> to protect taxpayers in the manner that Congress
> intended. Nevertheless, we are not intimidated by the
> lawless threats of your deputies, as any attempt by
> the IRS to follow through with these threats will be
> reviewed by the Treasury Inspector General for Tax
> Administration as well as our elected officials in
> Congress.
> Presently the record shows that the IRS has not only
> failed to refute our position but has even
> affirmatively offered evidence that our arguments are
> correct by refunding over $215,000 to No Time Delay
> Electronics. Therefore, until such time as we are
> shown to our reasonable satisfaction to be holding
> mistaken positions, Mr. Jesson, NITE and I will
> continue to operate as law-abiding Citizens within the
> letter of the law as we have applied.
> We expect a response from you within fifteen (15)
> business days.
> Respectfully,
> Thurston P. Bell
> Executive Researcher and Founder
> National Institute for Taxation Education
> SUMMARY OF THE LETTER
>
> The employers' position is careful to follow the laws
> and regulations.
> The applications went through IRS's procedures and
> were approved.
> The NY Times articles were both inaccurate and biased.
> Employer Jesson and Thurston Bell requested a meeting
> with the IRS to discuss the issues and the IRS did not
> respond at all.
> The IRS has not responded to Mr. Bell's letter. They
> refused to deny or respond to former CID investigator
> Joe Banister's report that concluded the findings by
> numerous tax researchers were correct. They have
> declined to reply to invitations to five conferences
> conducted by We The People Foundation to discuss
> questions and issues. (For further details of these
> attempts, go to our web site.) We have posed the
> crucial question: "At what point must continued
> evasion be regarded as an admission that the tax
> researchers are correct, and that there is no law that
> requires most citizens to pay income tax?"
> ___________________________BOX______________________________
> * In 1913, Americans got the federal income tax and a
> central bank (the Federal Reserve System). There is
> evidence in support of the hypothesis that the income
> tax was imposed on the American people so that the
> owners of the (private) central bank could control not
> only our money but our government as well.
> ___________________________BOX______________________________-
>
> SHODDY JOURNALISM: David Cay Johnston and The NY Times
> become an issue.
> Our previous message two weeks ago noted that the NY
> Times has assumed the role of cheerleader for the IRS,
> obviously hoping to sic 'em onto the employers who
> have stopped withholding, even though in accordance
> with the rules.
> In another Times article on February 23, David Cay
> Johnston reported that the recent sentencing of a
> couple for crimes involving tax evasion followed a
> trial at which defendants' case was based on Code
> section 861. Larken Rose, a tax researcher who has
> studied and written authoritatively about the 861
> position, asked Mr. Johnston about it, and he
> acknowledged that the 861 position was not mentioned
> at the trial and was not an issue adjudicated. This
> represents irresponsible and misleading journalism.
> Check Larken Rose's website at

http://www.Taxableincome.net

> for more information (email: larken@taxableincome.net).
> We also have a copy of a very biased, hostile and
> condescending letter Mr. Johnston sent to Mr. Jesson
> two weeks ago in response to Jesson's challenge that
> Johnston show him the law that makes him liable, and
> noting that the California tax board, whose tax rules
> are the same as the federal, had recently approved his
> position. We'll not print that letter at this time,
> but it has become evident that Mr. Johnston has set
> out upon a one-man crusade, using the NY Times as his
> vehicle, against any and all who don't agree with his
> views on the income tax, even though he acknowledges
> in the letter that he hasn't done research on it.
> His letter asserts that the issues Jesson has raised
> have been judged in tax courts, district courts, and
> appeals courts and been rejected as without merit. In
> fact, Thurston Bell's letter above states that these
> issues have never been addressed or adjudicated in any
> court case. Johnston's desire to discredit the
> employers has caused him to resort to inaccurate,
> false and unethical reporting.
> As further evidence of his unprofessional bias, Mr.
> Johnston "pulled the plug" on an interview when the
> guest interviewee, Virginia Cropsey, J.D., an expert
> on the 4th Amendment and IRS liens, began to speak
> about warrant requirements for federal seizures of
> property for income taxes and that IRS seizures had
> decreased by 98% because they can't get a warrant,
> since it would require them to lie under oath that a
> tax was owed. She said she had never spoken with a
> more insolent, biased reporter, who didn't want to
> hear any explanations about the tax laws that he
> couldn't refute. She said she had lost a lot of
> respect for the Times. Check her website at
> www.getawarrant.com.=
> It appears to us that there is serious reason to
> question whether the readers of the NY Times are well
> served by David Cay Johnston's brand of reporting,
> since it is biased and incompletely researched. If you
> would like to express your opinion about the NY Times
> articles by David Cay Johnston, you can do so by
> calling his superior, Glenn Kramon, Business Editor,
> at (212) 556-1471.
> _______________________________-BOX
> ____________________________
> LATE NEWS: The Texas Incident
> Subsequent to the NY Times articles, the IRS contacted
> Clubb Spa and Pool, a company in Keller, Texas, just
> northwest of Dallas, that had stopped withholding in
> accordance with the provisions of the law. The IRS
> wanted to send a couple of auditors to review their
> books and records. On the appointed day, last Friday,
> February 23, five people showed up, three of them
> conspicuously carrying guns. When asked by company
> owner, Teri Clubb, who the armed men were, they
> refused to disclose their identities. The company
> called 911, police officers arrived who told the
> agents they'd have to identify themselves or leave.
> The IRS group left, still (except for one auditor)
> refusing to give identities. As of this writing, the
> police have not provided the owner with a written
> incident report.
> If revenue officers are authorized by law (Code
> section 7608) to conduct only civil enforcement of
> alcohol, tobacco, and firearms regulations, and the
> Criminal Investigation Division only authorized to
> investigate income tax matters involving U.S. citizens
> residing in foreign countries and nonresident aliens
> with U.S. income (Internal Revenue Manual chapter
> 1100), one wonders just what was going on, and under
> what authority.
> Employers have noted that in Texas, as in most states,
> garnishment of wages (which is what withholding is, if
> done without the employees permission) requires a
> court order. In Texas, it is even written into the
> state constitution, as well.
> This whole incident seems to resemble the old Brown
> Shirt intimidation tactics of Nazi Germany. But the
> owner of one company said, in effect: "This is
> America. Don't show us your guns; show us your
> authority."
> ______________________________FOOTER__________________________________
>
> This message is part of PROJECT TOTO, a plan to
> educate millions of citizens (along with accountants,
> tax attorneys, legislators, judges, IRS employees, and
> prospective jurors) about the true limited application
> of the income tax laws, to expose any operations of
> the IRS that are unauthorized by law, and to put an
> end to any illegal collection of taxes from people who
> do not owe them. We want to publish several additional
> full-page ads in this newspaper, each of which costs
> tens of thousands of dollars. Your help is urgently
> needed. Please send a donation .In addition, please
> order 500 copies of this ad from WTP for $50.
> Jefferson said it best, "When the government fears the
> people, you have liberty. When the people fear the
> government, you have tyranny." Sponsored by We The
> People Foundation For Constitutional Education, Inc.,
> 2458 Ridge Rd., Queensbury, NY 12804,
> http://www.givemeliberty.org/
> mailto:mailto:acta@capital.net (518)= 656-3578 Fax
> (518)656-9724
> ----------------------------------------------------------------------------= --------
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