The Tax Court has jurisdiction only when the Commissioner issues a valid deficiency notice, and the taxpayer files a timely petition for redetermination. Scar v. C.I.R., 814 F.2d 1363 (9th Cir. 1987). (Emphasis added.)Some of you have even been told that the best way to control the taxing agencies is to use the agencies' administrative procedures and process. But ask yourself, if you subject yourself to the rules and regulations of a taxing agency, who is really in control?
As incredible as it seems, there are no laws making alleged income tax offenses crimes, and no court was ever given jurisdiction to prosecute anyone for committing any such offense.Schiff, as well as some other promoters, would lead the patriots to believe that the federal district courts do not have jurisdiction to try criminal cases for violations of the Internal Revenue Code, which is Title 26 of the United States Code. The reason given by the promoters of this argument is that there is no section in Title 26 granting the federal district courts jurisdiction in criminal cases. The true fact is, however, Congress did grant the federal district courts such criminal jurisdiction. Let me explain.
The district courts of the United States shall have original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States. 18 U.S.C. 3231. (In Part. Emphasis added.)This issue has been heard and ruled on by the courts before. A rather thorough history and ruling regarding 18 U.S.C. 3231, as it applies to crimes listed in Title 26, is provided in the case of United States v. Sasscer, 558 F.Supp. 33 (D. Ct. Maryland 1982). The Sasscer Case shows that the ancestry of 18 U.S.C. 3231 can be traced to the First Judiciary Act of 1789 which also specified which courts would have original and exclusive jurisdiction of all crimes committed against the laws of the United States. Also, see United States v. Spurgeon, 671 F.2d 1198 (8th Cir. 1982).
"Therefore, no unincorporated American can have any "income" subject to an "income" tax, since the word "income," for tax purposes, means a corporate profit."Schiff, and some other promoters, would lead the patriots to believe that the United States Supreme Court has ruled that the meaning of the term "income" for income tax purposes is limited to gain or profits derived from corporate activities. A careful reading of the court cases will, however, reveal that such a proposition is not true at all.
". . . must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act and what that meaning is has now become definitely settled by decisions of this court." Merchant's Loan & Trust Co. v. Smietanka, 255 U.S. 509, 519 (1921).It is one thing to say that the term "income" must be given the same meaning as was given to it in the Corporation Excise Tax Act. It is entirely another thing to say that the term "income" for income tax purposes only means corporate profit. No place in all of the United States Supreme Court opinions, I submit, will you find where the Court limited the term "income" for income tax purposes to mean corporate profit.
"For the present purpose we require only a clear definition of the term "income" as used in common speech, in order to determine its meaning in the Amendment...." Eisner v. Macomber, 252 U.S. 189, 206-207 (1920).The Court quite correctly proceeds to define the term "income" for purposes of the Sixteenth Amendment and a so-called "income" tax, as well as for purposes of the Eisner Case, to simply mean profit or gain derived by the person subject to the tax (the "taxpayer") for his separate use and benefit. If you check your dictionaries, you will find that "income" is simply profit or gain.
The Eisner Court,
After examining dictionaries in common use (Bouv. L.D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.)....
Eisner, supra, at 207,
|Elizondo||:||Who's on the air? Hello.|
|Richard||:||Yeah, this is Richard.|
|Elizondo||:||Yes, Richard, give us an update.|
|Richard||:||We're on our way right now to Flamingo and Maryland Parkway.|
|Elizondo||:||Flamingo and Maryland Parkway.|
|Richard||:||We will be passing out free tapes -- tapes.|
|Elizondo||:||And what is contained in those tapes, Richard?|
|Richard||:||Uh, we'll be there til 5:30 --|
|Elizondo||:||O.K., tell us what's in those tapes.|
|Richard||:||It's everything that you need to know about the income tax itself, and if you're not thoroughly convinced that there is no law that requires anybody to pay income tax, just return the tape.|
|Elizondo||:||There you go --|
|Richard||:||Uh, just suppose, John, I told you that I could give you an immediate raise. Would something like this be of immediate interest to you?|
|Elizondo||:||Oh, you bet it would be.|
|Richard||:||Well, that's what we're talking about folks. There is no law that requires anybody to even file an income tax form, let alone to pay one.|
|Elizondo||:||Now, right --|
|Richard||:||However, we do file one for the simple reason that they cannot prosecute an individual that files a legitimate tax return. A zero return, has been declared a legitimate return not only by the 9th Court of Appeals right here in San Francisco, but also by Congress.|
Otto Skinner's Comments...
The 9th Circuit Court of Appeals did not say a "zero" return was a legitimate return. The Court said:
Nothing can be calculated from a blank, but a zero, like other figures, has significance. A return containing false or misleading figures is still a return. False figures contain false information, but they convey information.In other words, the false information creates a false return; not a legitimate return. A person with no "gross income" is not required to file in the first place.
|Elizondo||:||Right, and we're in the 9th Circuit, too, right.|
|Richard||:|| Right. And the term "income" defined by Congress means corporate profit.|
Otto Skinner's Comments...
Congress has not, and cannot, define the term "income". I think even Schiff acknowledges the case of United States v. Ballard which stated that Congress had not defined the term "income", and the case of Eisner v. Macomber, wherein the United States Supreme Court explained why Congress has no constitutional power to adopt their own definition for a term used in the Constitution.|
The Eisner Case not only explains a very sound principle of constitutional law, the Court explains the principle in such a way that almost anyone should be able to understand it. Apparently, Elizondo and Richard haven't read the cases for themselves. Yet, they are talking other people into following Schiff's material. The blind leading the blind.
|Elizondo||:||Right. Now, all --|
|Richard||:||Now if anybody thinks that they're a corporation, I've got news for them. O.K?|
|Elizondo||:||Yeah, well --|
|Richard||:||They are not.|
|Elizondo||:||The information is on that free sampler tape. You're going to be out at Flamingo and Maryland Parkway, and you'll see the public alert sign. Honk your horn if you want to stop paying income taxes and Richard will be out there with some volunteers. Thank you, Richard. Thank you for your telephone call. Let's go -- we also have a public alert system clear out in Henderson on Boulder Highway and Lake Mead and we're waiting for Wayne to give us a call, not unless he's already called in, but Wayne give us a call, give us an update. And, just walking in the studios -- Hello, Irwin Schiff. You just got off one radio show and here you are again.|
|Schiff||:||Yes, well -- ha, ha, ha --|
|Elizondo||:||You never stop, never stop.|
|Schiff||:||I was just interviewed -- nice station, it's a big station, KPRC in Houston, and it's going to be aired Saturday or Sunday, so when we go to our satellite and short wave I'll be able to notify our listeners in the Houston area that they can hear me. It's going to be aired either Saturday or Sunday. I don't know the time, but they're going to have to call KPRC if they want to hear the interview. But, pardon me -- what I would like to do right now is that last week, Sam the Radio Man, and I hope he's listening, called this show and he brought up the question of Otto Skinner and his book. Uh, and his latest book is called The Biggest "Tax Loophole" of All."|
|Elizondo||:||Who is Otto Skinner?|
|Schiff||:||Otto Skinner is an individual who has written a few books, a couple of books on the income tax, and in my view, he has really confused a lot of people and led them astray. But, in any case, I said last week, and I was criticized by a couple of people for doing so, that Otto Skinner was a liar.|
|Schiff||:||Now, frankly, I'm not the most diplomatic guy in the world, and I think I'm honest, and when a man comes out and lies, uh, you know, he's a liar. Now I know that you're maybe not supposed to call people liars. I once heard Thatcher -- what's her name --|
|Schiff||:||Margaret Thatcher called a guy a liar, but didn't say he was a liar. She was, uh -- this was in Parliament -- and she called him a liar in such diplomatic terms it was beautiful. But I'm not -- I don't have the eloquence of a Margaret Thatcher. So, --|
|Elizondo||:||Can I interrupt you for just for one minute.|
|Elizondo||:||Our Public Alert System out at Henderson we're expanding. Before you get into that subject, let's go to Wayne. Wayne, are you there? Wayne Shenk?|
|Wayne||:||Yes, I'm right here. Yes, I'm right here|
|Elizondo||:||Wayne, am I pronouncing your last name right?|
|Elizondo||:||All right, Wayne, tell our folks out there where you're located.|
|Wayne||:||We're on the corner of Lake Mead and Boulder Highway right across from the Circle K.|
|Wayn||:||Uh, also catycorner to St. Rose Dominican Hospital --|
|Elizondo||:||Uh, huh --|
|Wayne||:||And if you're looking for us, we're on the southeast corner, and we've got our public alert sign up --|
|Wayne||:||And we have tapes to give away to give away to the people in Henderson.|
|Elizondo||:||Now, you can pick us up there. KLAV reaches out there to Henderson, right?|
|Wayne||:||It works excellent here.|
|Elizondo||:||Good. O.K. So honk your horn. Go out there. Do you have other volunteers with you, Wayne?|
|Wayne||:||Yes. We have two other volunteers and we're passing out tapes right now.|
|Schiff||:||Great. Now I want to tell the people who may be turning to tune us in for the first time because they heard the Public Alert. We're going to be explaining, folks, how you can file a tax return this April 15th and get back all the income taxes that you paid in 1997. And we're also going to explain how you can stop your employer from withholding taxes from your pay. In other words, there is no law requiring people to pay income taxes and this is what this show is all about. But, I want to explain, and I told Sam --|
|Elizondo||:||Wayne, thank you very much for your phone call. Keep us informed in another thirty minutes, O.K.?|
|Elizondo||:||Thank you, sir.|
|Schiff||:||Now when Sam brought up Otto Skinner and his new book, and I said he was a liar, again I was criticized. But if you have actual documented proof that the man is not telling the truth, and let me read --|
|Elizondo||:||You have documentation?|
|Schiff||:||Oh, yeah, right here, now listen. I'm quoting from his book, uh, The Biggest "Tax Loophole" of All, and if you want to write for his book, I'll even tell you the price he's charging, but --.|
|Elizondo||:||Why would you want to waste your time?|
|Schiff||:||No, no. I'm going to give -- P.O. Box 6609, San Pedro, CA|
|Elizondo||:||You're too fair.|
|Schiff||:||And he charges for the book, let me see, $39.95 he gets for this book plus $5.00, so it would be over $40.00 bucks.|
|Elizondo||:||Why fill your head with garbage. I don't understand this.|
|Schiff||:||Will you give me a chance? I don't want anybody to think that the reason I don't want him on --|
|Elizondo||:||It's your show, you can do it --|
|Schiff||:||If I had him on it would just waste time. Let me -- I'm going to read from this book. Now this book supposedly is exposing various, uh, various incorrect procedures in the claiming of taxes. So, flawed argument #12, he says -- and I'm reading right from the book. "The individuals file tax returns with zeros into the spaces provided under the theory that the zero tax return satisfies the requirement of making a required return." First of all, he quotes required as if you're required to file a return. Maybe, no, you're not required to file a return maybe that's why he has quotes. Let me read what it -- I'm going to read right from his book. "To support this frivolous and dangerous position, the promoters --" meaning me -- "list three appellate court cases, namely, the United States vs. Moore, United States vs. Long and United States vs. Kimball. This position is further supported with the flawed claim that the term 'income' only means corporate profit." Now this is coming from a person who is holding himself out, folks, as --|
|Elizondo||:||As an expert--|
|Schiff:||:||Yes. "By submitting such forms, the individual is setting himself up for a $500 civil penalty for filing a frivolous return for each return filed, along with the distinct possibility of criminal charges for attempted tax evasion and also for filing false and fraudulent returns." Now each one of these statements, I want to comment, is incorrect. First of all, he should know that the IRS is not even authorized to impose a civil penalty. Secondly, he should also know that there is no statute making anything in connection with the income tax criminal. And, thirdly, he says (inaudible) attack by filing a false and fraudulent return. You can't be file -- if you file my zero return, you can't be prosecuted for filing a false and fraudulent return because on the attached pages we say this return is not being filed voluntarily. We're filing it to avoid being charged with willful failure to file. So he should know that all of these statements are incorrect or misleading. Now, but listen to this -- now he cites the three cases that I cite, and this is what he says. "The Moore case simply does not support --" oh, in my zero return, we cite U.S. vs. Moore as one of the cases which, uh, states that filing a zero return is a legitimate return. Now he's trying to refute that. He says, "The Moore case simply does not support the proposition that is purported by the promoters." Now listen to this -- "Moore was convicted for failure to file returns. He had entered zeros on returns for the years 1972, 1973 and 1974." So he says that Moore had entered zeros on his returns for 1972, 1973 and 1974. Now he goes on to say, "The 7th Circuit of Appeals held, 'it is not the false data which makes these returns defective but the fact that there is no real attempt to comply with the filing requirement of filing a return. The conviction is affirmed.'" So now, here is Otto Skinner saying that Moore filed a zero return. That is a false statement. Let me read from the case itself, and now I'm reading from the case of U.S. vs. Moore, 627 F.2d 830. I'm reading from the case, "In April 1973, defendant and his wife submitted a joint return for the year 1972. This form contained only their names, occupation, social security number and the number of dependents. Fifth amendment objections were written across the form and a packet of tax protester literature was attached. The form was signed by the defendant and his wife. But the verification was scratched off." Incidentally, we don't scratch off the verification.|
|Schiff||:||"The IRS notified defendant in August 1973 that the forms were not sufficient returns. In a rather contemptuous January 1974 letter, defendant replied to the IRS stating that he considered dollars to be worthless and his tax return to be adequate. In May 1974, however, defendant submitted an amended 1040 form for the year 1972. This form was filed for himself only. On the amended form defendant filled in the various blanks for numerical information with 'None', except that under interest income he put $41.00 and in the dividend income he placed a figure at $22.00. The Fifth Amendment objections were retained and more tax protester material was appended. Although signed, the certification on the form was again marked over. In 1974, defendant also filed a return for the year 1973 which was substantially the same as his amended form in 1972. It contained a small amount of interest income and the certification was scratched off. The IRS notified defendant by letter in July 1974 that it did not consider this to be a return. In 1975 defendant filed a similar return for the 1974 year. The IRS again informed him that it did not consider this to be a return." So at no time did Moore file zero returns. He filed returns in which he showed None, he put Fifth Amendment, he inserted small amounts --|
|Schiff||:||At no time did he file a zero income return. Now either, um --|
|Elizondo||:||Skinner can't read --|
|Schiff||:||If Skinner commented on the case, how could he have said that Moore filed zero returns? He didn't. He claimed the Fifth Amendment, he inserted $22.00, $41.00. He did not file a zero return at all. So in his book, Otto Skinner says, "Moore was convicted for failure to file. He entered zeros on returns for the years 1972 --|
|Elizondo||:||That's a lie. That's an absolute lie.|
|Schiff||:||Am I wrong?|
|Elizondo||:||No, you're not wrong. He is a liar.|
|Schiff||:|| Now let's continue. Let me read from the Moore case. See, the Moore case found Moore guilty because he didn't file a zero return. Now, let me read from the case. "It may have not even been necessary for the District Court to give this instruction. The IRS" -- oh, that's not -- Here, let me get -- Oh, let me find where they say -- Oh, now here's what he says in the Moore case. "The Ninth Circuit, however, has taken the opposite position. In United States vs. Long" (and he cites the case) "the taxpayer submitted a form with zeros in all the blanks. The court held that even if this information were false, a tax liability could be computed from it and it was, therefore, an adequate return. Part of the court's rationale appeared to be that a different penalty could be levied against those who took the chance of supplying false information." He says, "Where the same court affirmed the" -- in other words, the Ninth, and then he goes on to say, "The Ninth Circuit is clearly correct in stating that a tax liability could be computed from zeros." So, therefore, I cited the Ninth Circuit in my attachment by simply showing that the Ninth Circuit -- uh, that the Seventh Circuit agreed with the Ninth Circuit that filing a zero return was an adequate return. Now we're claiming that all the government can do is say -- well, the information is false and, therefore, charge us with tax evasion or, uh, charge us with perjury. But, this is proof that a zero return is a return. So, uh, Otto Skinner totally misrepresents the Moore case in his book. Now, let's continue. So now he totally misrepresents the Moore case and he lies about the return that was filed in this particular instance. Now, let's continue from his book. "The Long Case presents a different situation. The government claimed that they had no record of Long having filed returns. Long claimed that he had filed returns with zeros in the space provided. The court explains that during the years in question, 1972, 1973 and 1974, the Internal Revenue did not always keep copies of documents it considered invalid returns. Because of this, the government was not able to prove that Long had or had not filed, taking a different position than did the Seventh Circuit in the Moore case." Well, they didn't take a different position. The Ninth Circuit explains that since the zeros could be calculated, even a return containing false information is still a return." That's our point. So even Skinner acknowledges that. "The court goes on to explain that if the Service had kept the papers Long claimed he had filed, it could have brought some other charges." Well, O.K., sure. They can bring other charges. If they want, let them charge that the person filed -- let them charge him with tax evasion or charge him with committing perjury. But none of the people here or anybody else who has filed zero returns, and I'm sure we've filed thousands, nobody has been charged with tax evasion or perjury. Incidentally, if anybody's going to be charged with anything in connection with the zero return, it will be me. Because Section 7206 states that it is a crime for anybody to counsel or advise anybody to submit false claims to the government. And since I am the developer of the zero return, we've got hundreds of thousands of people filing claims to the government to get their money back --|
Otto Skinner's Comments...
The facts are that the 9th Circuit in Long held that returns with just zeros on them would be considered returns, even if the information were false, and the government could bring other charges if they actually had the returns for evidence. The 7th Circuit disagreed with the 9th Circuit. The 7th Circuit points out, at page 834 of the Moore Case, that:
Varying positions have been taken by the Courts of Appeals.The 7th Circuit considered returns with just zeros entered in the spaces provide as being no better than returns with "none" in some spaces and just a small amount of income reported in other spaces; which was one kind of return Mr. Moore had submitted.
In the three cases regarding the "zero" returns to which Schiff refers in supposed support of his argument, not a single one of these cases involved a hard-copy of a "zero" return. Moore had entered a small amount of income for interest and dividends, and he was convicted. Kimball had entered asterisks in the spaces provided. In United States v. Kimball, 896 F.2d 1218 (9th Cir. 1990), the 9th Circuit originally considered these to be returns, but after rehearing the issue in United States v. Kimball, 925 F.2d 356 (9th Cir. 1991), the Court stated:
We hold that the district court correctly ruled that Kimball's 1040 forms do not constitute returns.Long merely claimed he had filed "zero" tax returns, but the IRS had not kept these papers, and therefore, had no evidence to use against him in order to bring charges of filing false returns.
|Elizondo||:||That follow your method -- right, right --|
|Schiff||:||And if that's a crime, I'm the first one in line to be prosecuted. O.K. As it's said, could have brought some other charge. This, of course, would be felony charges for attempted tax evasion and filing false and fraudulent returns, but nobody has been charged for doing these things. Let's continue from the book -- from Otto Skinner's book. "We now come to the Kimball case. Kimball did not enter zeros on the returns which he filed but, instead, asterisks. At first, in United States vs. Kimball, the court held that the returns containing asterisks were valid returns. However, what the promoters of this flawed argument failed to say is that the Ninth Circuit changed its mind. On rehearing the issue in United States vs. Kimball on the re-hearing the court determined that because asterisks could not be used to calculate even a false return, returns containing only asterisks did not constitute returns. In other words, while zeros report zero income, asterisks do not report any income at all." Well, it's not important for me to have pointed out that this was reversed because this particular case involved asterisks. They first ruled that the asterisks were returns then they changed their mind. Uh, well this has nothing to do with the observation that had -- which Kimball said. Here's what Kimball said. "So even if a return contained only zeros it is considered a return it can be considered frivolous." So here is Kimball saying while though it can be a return, it still can be considered frivolous for the purposes of $500 civil penalty. But it's not frivolous because if he had looked at the 12 page -- 12 paragraph attachment, a zero return does not fall within the law talking about frivolous returns because the word frivolous means something silly -- something without any legal foundation. In our attachment on the zero return we cited no less than four Supreme Court cases which ruled that income is a corporate profit. Incidentally, on the new attachment we're increasing the number of Supreme Court cases to ten. So, we're going to on ten cases --|
|Elizondo||:|| Oh, addition huh?|
Otto Skinner's Comments...:
People who are considering filing "zero" returns should look up section 6702 of the Code. It explains quite clearly that for civil penalty purposes, if the return on its face indicates that the self-assessment is substantially incorrect, or that the position is frivolous (no foundation in law) a $500 civil penalty can be imposed.|
When one claims he has zero wages, salary, tip, etc., and claims that this inaccurate information constitutes a legitimate return, and further claims that court cases hold what they do not really hold, thus providing a return based on no foundation in law, it is pretty easy consider such a return a frivolous return.
Also, Schiff apparently does not tell his listeners that there is currently a man in Michigan facing felony charges under section 7206 of the Code for filing "zero" 1040 returns. I suggest the readers look up both sections 6702 and 7206 in the Code.
|Schiff||:||Yeah. O.K. "A frivolous return is a document which purports to be a return but does not contain information on which the substantial correctness of the self-assessment can be judged." But our filing of zeros does contain accurate information because we say we have zero income because income is a corporate profit. "A position is considered frivolous when it is something that is contrary to established law and unsupported by reason (inaudible) argument for a change in the law." Well, who says our zero return is frivolous? We point out -- not only do we cite four Supreme Court cases, but we're upping this to about ten now in the new updated page, but we also cite no less than nine code sections, we cite about three or four references to Treasury Regulations and there's two or three references to the Privacy Act Notice -- so it's not frivolous, and in order to be frivolous it would have to be filed to delay the payment of the tax. Now, our statement makes it clear, we're not delaying the payment of the tax -- we're not paying. As a matter of fact, we want all our money back. Now, let's continue with this. So he's misrepresenting and misleading; every paragraph on here is either a lie or false or what have you. Now let's go to the next paragraph. "Now to the supposed supporting argument claimed that the term "income" only means corporate profit. The promoters cite the case of Merchants Loan & Trust Company vs. Smietanka, 255 U.S. 509 where the court held that the word income 'must be given the same meaning in all the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act and what that meaning is has now become definitely settled by decisions of this court.'" That was the most extensive -- that's correct -- he cited that correctly --|
|Elizondo||:||Quoted it, yeah --|
|Schiff||:||Yeah, he cited it correctly, but what did the courts say? The word income means a corporate profit. The word income means the same thing as the word income meant in the Corporation Excise Tax Act of 1909. Incidentally, not only do we cite this case but we cite about three or four other supporting cases. But now we're going to cite about nine, O.K.? Now, the above case he mentions that Merchants Loan & Trust refers to the Eisner case previously discussed, which shows that the term income means profit or gain. Now again he's admitting that in Eisner the Supreme Court said that income means profit or gain. "But promoters of this flawed argument make a leap in logic to conclude that the term income only means corporate profit." Well, what else can it mean? Now, here is Otto Skinner who, Sam the Radio Man, wants to put some credibility in, and apparently Otto Skinner doesn't even understand that the word income does mean a corporate profit. So here he says that, "But the promoters of this flawed argument make a leap in logic to conclude that the term income only means corporate profit." Well, why would that mean a leap in logic if the Supreme Court said in Merchant's Loan & Trust Co. that the word income must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act of 1909? Now he says, "This is truly a frivolous position." Well, again, how can it be -- it could be wrong, incidentally, but how can it be frivolous? Frivolous means based on nothing, it means silly. Well, let's assume I was wrong, O.K.? Well if I were wrong, it was certainly not frivolous. I could have misread the Merchant's Loan & Trust Co. vs. Smietanka, but how can you misunderstand what they said. They said income means a corporate profit. He says, "This is truly a frivolous position because the United States Supreme Court has never held that the term income is limited to corporate profit." Yes, they have. Well, how could it be -- how could it mean a corporate profit and not mean a corporate profit? If the Supreme Court in Merchant's Loan & Trust Co. says "must be given the same meaning -- what that meaning is has now become definitely settled by decision of this court" -- if they said the word income means a corporate profit, then if it can mean a corporate profit, what have they said? It means a corporate profit sometimes, but sometimes it doesn't mean a corporate profit? Sometimes she's pregnant and sometimes she's not pregnant? Sometimes it's white and sometimes it's black, but sometimes we can't tell what it is? O.K., let's continue with this Otto Skinner --|
|Elizondo||:||With this frivolous book, ha, ha, ha --|
|Schiff||:||And he charges, what, $38.00 for this book. O.K., let's continue.|
|Elizondo||:||Are the sheets real soft?|
|Schiff||:||"The above case refers to the Eisner case previously discussed which shows that the term income means profit or gain. But the promoters of this flawed argument make a leap in logic" -- O.K. "This is truly a frivolous position because the United States Supreme Court has never held that the term income" -- sure, sure they have. Other cases try to hide the true meaning of income, but Merchant's Loan & Trust Co. vs. Smietanka, if you want to Shepardize it, has never been reversed, never been repealed, never been overridden. "It has essentially held that income means what ordinary dictionaries say it means." That's nonsense. The word income cannot mean what an ordinary dictionary says. And if any court says that, then Otto Skinner should also know that that judge is not telling the truth. It can't mean what the ordinary dictionaries say it means. For tax purposes the word income means a corporate profit because when the government puts a tax on corporate profit it is taxing income separated from the source. A tax on wages or a tax on dividends is a tax on the source. See, Otto Skinner doesn't even know there's a difference between income as used in our tax statutes and sources of income. Now let's continue, this is the final paragraph. "The zero income return appears innocuous on its face, but will lead the follower down a primrose path which can place him in harms way of $500 civil penalties" -- meanwhile, look at all the money we've gotten back from people. Somebody even called my office today telling me he got back $8,000.00 with the zero return. He never told me this before. I mean I have --|
|Elizondo||:||Let them try to take $500, do it. We'll sue them.|
|Schiff||:||Yeah, let them take $500 -- he's way ahead -- "and the possibility of some very serious criminal charges." Nobody has been charged criminally for filing a zero return. "It would help if individuals remembered that tax forms are for those who are subject to (liable for) a tax." Meaning, don't file anything. Now, the reason why we file a zero return, we point out in the zero return - I know I'm not required to file, I know I'm not liable for the tax, but I am filing in order to prevent myself from being illegally prosecuted for failure to file. So there's Mr. Otto Skinner in every paragraph dealing with the zero return, he either didn't tell the truth -- deliberately didn't tell the truth -- or he filed false and fraudulent comments with respect to the zero return. So now you tell me what kind of a label you might put on Mr. Otto Skinner who has the nerve to want to charge for this new book -- what does he want to charge for this book?|
|Elizondo||:||Let me see, $38.00 something --|
|Schiff||:||Oh, let me see -- Folks, if you want to order his book --|
|Elizondo||:||Use it for camping.|
|Schiff||:||Yeah, wait a minute. If you want to order his book, wait a minute, what is he--Oh, yeah, he's getting for this book $39.95 --|
|Elizondo||:||Forty bucks, huh?|
|Schiff||:||And $5.00 shipping|
|Elizondo||:||For false information. What a deal. What a deal!|
|Schiff||:|| If his book is worth Forty bucks then my book is worth no less than $200.00, probably more. Now just think of all the misleading and false information he was able to cram in -- in two pages of text. Now I defy anybody to take the Federal Mafia which is over 300 pages, I defy them to read me one sentence in that book that is misleading or not accurate.|
Otto Skinner's Comments...
First, regarding the dictionaries, the Supreme Court did indeed use dictionaries to determine the meaning of the term "income". The Supreme Court said:
For the present purpose we require only a clear definition of the term "income" as used in common speech, in order to determine its meaning in the Amendment; and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue.In spite of a somewhat lengthy explanation of the definition of "income" for purposes of the Eisner Case, the most important point here is that the Court has stated that to determine the meaning of the term "income" as used in the Sixteenth Amendment, it only required the definition as used in common speech. The documents the Court relied on for the "common speech" were the dictionaries. I submit you will not find a court case that limits the definition of "income" to corporate profit or gain, contrary to what Schiff claims.
You will notice that "income" is received or drawn by the recipient (taxpayer) for his own use or benefit. By the Code's definition, a "taxpayer is one who is subject to (meaning liable for) a tax (See Houston Street Corp. v. C.I.R., 84 F.2d 821, at 822). The Eisner Court did not limit the term "income" to mean just corporate profit.
I wonder how many people who start filing "zero" tax returns, at Schiff's urging, actually go to a law library and read the court cases. I wonder how many of these people know just what it was that was being taxed in the Corporate Excise Tax of 1909? It sure wasn't "income" and it sure wasn't "corporate profit". Do you know what it was?
The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with advantages which arise from corporate or quasi-corporate organization; or, when applied to insurance companies, for doing the business of such companies.As you can see, the "income" was merely the measurement of the tax. Actually, the so-called "income" tax is now measured by the gross earnings (such as wages) minus whatever deductions Congress has allowed the "taxpayer", as that term is defined in the Code. See Code sections 1313(b) and 7701(a)(14). "Income" is simply profit or gain derived by the recipient. Also, you can see that the argument that "income" for income tax purposes means only corporate profit is indeed frivolous, i.e., it has no foundation in law. (See any law dictionary.)
Schiff asks: "What else could it be?" This shows that it is merely his assumption when he claim that "income" for tax purposes only means corporate profit.
Schiff also claims in his books and articles that the federal district courts do not have criminal jurisdiction over alleged violations of Title 26. However, the United States Criminal Code states:
The district courts of the United States shall have original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States.For a full explanation of this issue, see United States v. Sasscer, 558 F.Supp. 33 (1980). Actually, I think Schiff knows Mr. Sasscer personally.
If you read my books and check out the information in a law library, you might have fun taking Schiff up on his challenge to find misleading or inaccurate statements in his book called The Federal Mafia, as well as in his other books.
In December 1997, I received a phone call from a lady who identified herself as Sally Burkhart, a co-host on a talk show on KLAV, Las Vegas. She stated she worked closely with Schiff and she wanted to have me on a show with him. I declined. I remembered an old saying that went something like this: "Never argue with a fool in public because some of the public will not be able to tell which one is the fool."
Since I have already declined to be on a show with Schiff, it seems to me that he is now protesting too loudly. He knows very well that I strongly disagree with most of his asserted "legal conclusions".
If anyone has been damaged by following Schiff's advice, let me know. I would like to add up some numbers.
|Elizondo||:||Come on, you attorneys, we'll open up that phone line -- 731-1230 --|
|Schiff||:||So, Sam, you're the one who suggested I get Otto Skinner on the program -- Why? Why?|
|Elizondo||:|| We don't want to waste time, we want to take phone calls. All right, we're going to take a quick break. If you have a question or comment, those phone lines are open -- 731-1230. This is the time to call right now -- not later on in the program -- right now. The phone lines are open. 731-1230. This is Freedom Now. We'll be right back, stay with us.|
Otto Skinner's Final Comments...
|The Moore Case did not involve "zero" returns. Why, then, does Schiff reference this case as if it supports his "legitimate 'zero' return" theory?|
The Moore Case states at page 835, "The Ninth Circuit has taken the opposite position." Why, then, does Schiff claim that the 7th Circuit agrees with the 9th Circuit?
The Kimball Case involved asterisks. Why, then, does Schiff reference this case as if it supports his "legitimate 'zero' return" theory?
The Long Case did not involve any hard-copy evidence of "zero" returns actually filed by Long which could be used against him in a criminal case. Why, then, does Schiff use this case to claim "zero" returns are legitimate?
The Moore Case shows that the 9th Circuit held that even if the information was false, a return with just zeros is an adequate return for purposes of calculating a tax liability. Why, then, does Schiff refer to such returns as legitimate returns?
Line 7, on Form 1040, asks for wages, salaries, tips, etc. In other words, it asks for gross earnings; not "income" or "profit" or "gain". By reporting "zero" in the blank on line 7, the individual is reporting that he had zero wages, salaries, tips, etc. If this report is false, it is still reporting false information. Just because a report of zero earnings is considered by the 9th Circuit to be an adequate return (an official or formal report) from which calculations can be made, it does not necessarily mean it is a legitimate report. This is certainly something to consider before filing returns with zeros in the spaces provided.
Before an individual relies upon any court case, he should get a copy of the case and study it for himself. This includes the cases I cite in my books.
It is my personal belief that many people who read Schiff's books will be so filled with incorrect legal conclusions that they may never get the facts straight.
Because there is so much confusing and misleading material being perpetrated throughout the nation, I strongly believe that people should not take anyone's word on anything that has to do with the so-called "income" tax, but instead, they should check out all the material and cases for themselves.
Schiff offers a $5,000 reward if anyone can find a law that requires the payment of the tax. I consider this to be an empty offer. Just because there is no such law, it does not prove that a tax is not owed. If a person owes a tax, but simply cannot pay it, he cannot be legally incarcerated. We do not have debtor's prisons in this country. Because of this, there could be no law requiring the payment of a tax. Schiff's offer might sound impressive, until you analyze it. Will Schiff's nonsense never stop? You should be aware of the fact that section 7203 does make it a crime for a person to willfully fail to pay a tax that is owed. If a person owes a tax and can pay it, but willfully does not pay it, he can be charged with 7203.
This shows that the very regulations on which the prosecutions relies to assert that the Defendant had a duty to file some income tax return does not and never has had any assigned O.M.B. control number. Therefore, the duty to comply with this particular regulation has no real force of law and the same may be ignored by the public with impunity.Well, I will tell you right now that I strongly disagree with the Becraft article, and I will tell you why. Also, it is my understanding that this OMB/PRA argument, which I consider to be extremely flawed, was developed by Vern Holland of Oklahoma and Attorney Jeffrey Dickstein. It is also my understanding that people were charged a hefty sum to "learn" to use this particular argument.
"Defendant, Joe Patriot, well knowing and believing all of the foregoing [that he was (supposedly) required to make an income tax return], did willfully fail to make an income tax return to said director...."I have never seen an indictment or information charging an accused with failure to report his "gross income" on a Form 1040. I have never read a court trial transcript where the prosecutor ever argued to the jury that the defendant failed to complete a Form 1040. The Form 1040 is simply not part of the statute enacted by Congress requiring certain persons to make a return (report) of their "gross income", and it is simply not part of the charges against an individual for failing to make an income tax return (i.e., a report of his "gross income").
United States v. Wunder, 919 F.2d. 34, 38 (6th Cir. 1990); Trisha Zeller James (argued), James & James, Louisville, KY., for defendant-appellant..It is my personal opinion that after the Wunder Case, the other attorneys should have understood why the argument was not legally valid. I can only urge individuals to understand the substance of their own arguments, and to not rely upon anyone else to take care of them.
United States v. Bowers, 920 F.2d 220, 222 (4th Cir. 1990); Lowell Harrison Becraft, Jr., Huntsville, Ala., for defendants-appellants.
United States v. Bentson, 947 F.2d 1353 (9th Cir. 1991); William A. Cohan, Cohan & Greene, Encinitas, Cal., for defendant-appellant.
United States v. Hicks, 947 F.2d 1356 (9th Cir. 1991); Donald W. MacPherson, MacPherson & McCarville, Phoenix, Ariz., for defendant-appellant.
So the Sixteenth Amendment could just as easily read as follows:The above definitions reasonably and logically explain Chief Justice Edward Douglas White's statements in the Brushaber and Stanton Cases regarding taxation on income, wherein he explained that taxation on income was in its nature an indirect excise.
Congress shall have power to lay and collect taxes with regard to or with respect to or in consideration of or measured by the income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
on ... 22. a. In regard to, in reference to, with respect to, as to.As used in the phrase "taxes on incomes", only if the word "on" means "with reference to" (the income which is to be used to measure the amount of tax due from indirect taxes such as duties, imposts and excises) can it be explained that the income (property) is not the thing being taxed, but that it is on some taxable activity upon which an excise can be imposed. This is the only way to explain how Chief Justice Edward Douglas White could justifiably state in Brushaber and Stanton that taxation on income was in its nature an excise tax and that the Sixteenth Amendment simply prohibited the power of income taxation from being taken out of the category of indirect taxation to which it inherently belongs.
The Oxford English Dictionary, Second Edition, 1989, pg. 795.
on ... 12. with respect or regard to.
Random House Unabridged Dictionary, Second Edition, 1993, pg. 1352.
on ... (5) the object in connection with which payment, computation of interest, reduction or similar settlement is made. ... 7 a : with regard to : with reference or relation to : about.
Webster's Third New International Dictionary of the English Language, Unabridged, 1993, pg. 1575.
What has he really done? For one thing, he has written a book about his supposed investigation into the income tax issues. I not only question his motives and integrity, but I also question how well he actually "investigated" the issues.
Two of the issues his book promotes, as if they are legally valid, are:
As far back as 1986, in my first book, The Best Kept Secret, "Taxpayer" V. Nontaxpayer", I explained in very simple terms just why these arguments should not be used as an excuse for not filing tax returns. See www.goodbiz.com/tbks Yet, various promoters have continued to promote such arguments and now Banister has essentially "teamed up" with these promoters. What are Banisters real motives? Are they to entrap more and more non-filers into believing legally flawed arguments in order to set them up as easy targets for government prosecutors? (See the article Who Are You Going to Trust? on my web site at www.goodbiz.com)
Let me give you an example of the Fifth Amendment issue found in Banisters book that causes me to question his motives and integrity. In his book, at page 6, Banister shows a letter apparently written by Bill Conklin as a news release. (I think you'll see where Conklin and Banister have the Fifth Amendment issue so convoluted it is no wonder why the average non-filer never figures out what is really going on.)
The first part of Conklins letter discusses the Fifth Amendment issue as if it is an excuse for not filing tax returns. In the last part of the letter, Bill Conklin states:
I have won six published wins against the IRS on my case alone. The cites are:
LETTER MISLEADING: This letter would lead the reader to believe that Conklin actually won these cases, and that he won them based upon his Fifth Amendment argument. I submit that none of these cases actually involved the Fifth Amendment. In none of these cases was anything ever used against an individual in a criminal case. In none of these cases was any individual ever forced to provide any information that would tend to incriminate him.
WHERE ARE THESE PURPORTED WINS? I challenge anyone to find in these cases where Conklin won anything of substance. Even in the cases that were reversed and remanded back to the district court, either Conklin or Tavery eventually lost their case. Except where Conklin obtained the $30 as a witness fee for witnessing in response to a summons, I submit that the appellate court eventually ruled against Conklin and/or Tavery in every other case. I dont see people lining up for an IRS audit just to collect a $30 witness fee, so I do not consider that accomplishment to be anything of real substance.
As an example of Conklins purported "wins", in Church of World Peace, Inc. v. IRS, 715 F.2d 492 (10th Cir. 1983), Conklin filed an action for declaratory judgment. The federal district court dismissed his case. The appellate court affirmed the dismissal. How can Conklin call this a win?
You can then check them out for yourself. Send $20 cash to Otto Skinner at PO Box 6609, San Pedro, California 90734, and I will send you a copy of the six cases listed above, plus Tavery v. U.S., 32 F.3d 1423 (10th Cir. 1994) discussed below. I think you will find in these cases that the financial information was supplied to the IRS and the deficiencies were paid. So what, if anything, of value was actually won by Conklin or Tavery? In my opinion, nothing.
Conklin had gone to the government and obtained a government granted privilege of operating the "church" (TWP) as a 501(c) tax exempt organization. Conklin and Tavery had both filed tax returns. None of the cases listed above stand for or support the proposition that the Fifth Amendment provides an excuse for not filing a tax return.
HOW ONE CAN FILE A 1040 FORM WITHOUT WAIVING HIS FIFTH AMENDMENT RIGHTS? While we are on this issue, I will tell you how an individual can file a 1040 form without waiving his Fifth Amendment rights. It is really quite simple.
Lets use a fictitious Suzie Que as an example. Suzie has never done anything wrong. She hasnt so much as run a stop sign. Suzie is 22 years old. She is a legal secretary. She earned $27,000 in 1998. Can she put her age, occupation and the amount she earned in 1998 on a 1040 form and mail it to the IRS on March 30, 1999, without waiving her Fifth Amendment rights? Of course she can. There is nothing here that would tend to incriminate Suzie. The Fifth Amendment protects an individual from being forced to provide information that would tend to incriminate him.
By providing the information above, Suzie has provided nothing that would even furnish a link in a chain of evidence needed to prosecute her for a crime. If no such link is furnished, it is not a waiver of Fifth Amendment rights. This principle has been around for a long time. See U.S. v. Neff, 615 F.2d 1235, 1939 (9th Cir. 1980) wherein the court quotes Hashagen v. U.S., 283 F.2d 345, 349 (9th Cir. 1960).
If Suzie had robbed a bank, she would not be required to put that information on a tax return. But if you know Suzie like I know Suzie, you know that Suzie would never rob a bank.
There is, however, a time and place for a non-filer to utilize the Fifth Amendment. This issue is more complex and is discussed in my books and in the past issues of Nontaxpayers United Newsletter. See www.goodbiz.com/tbks
Now lets get back to Banisters book. On page 8, he states:
In order to understand Conklins victory, .
Two paragraphs down, he states:
Conklins victories focused my attention on the fact that American taxpayers, without realizing it, apparently waive their 5th Amendment rights every time they submit information on their federal tax returns.
What Victory? What Victories? I believe that what should be apparent to any CID agent, is that the Fifth Amendment argument as an excuse for not filing tax returns has been failing individuals since long before 1980.
On page 10, Banister discusses another Conklin case (not one of the cases listed above) where Conklin had filed unsigned returns and was hit with a $500 penalty for filing a frivolous return. (Study 26 U.S.C. 7602 and you will understand the reason for the $500 penalty.) Banister states:
Conklin even gave the Internal Revenue Service a power of attorney to sign the returns for him if they could do so without waiving his 5th Amendment rights.
This may sound impressive, but I do not believe any IRS person has the authority to sign a return that an individual submits; with or without a power of attorney. In my opinion, to expect an IRS person to sign such a document is down right stupid.
Banister goes on to say that Conklin sued in federal court, and that Judge Nottingham eventually ruled against him. This Conklin loss is apparently supposed to mean that Conklin proved his Fifth Amendment argument. Is the reader supposed to believe that a loss is a win? That a loss is a victory? I dont know about you, but I am sick and tired of double speak within the patriot community.
In his book, Banister refers to Bill Conklins book, Why No One Is Required to File Tax Returns. At page 38 of this book, Conklin is discussing Tavery v. United States, 32 F.3d 1423 (10th Cir. 1994). Tavery (Conklins spouse) was arguing that information on her tax return should not have been used in Conklins contempt of court case regarding his eligibility for appointment of counsel. Both the district court and the appellate court ruled against her.
Still at page 38, Conklin states:
It is clear in this particular situation that Ms. Tavery waived her Fifth Amendment protected rights when she filed the tax return and disclosed the information that the government allowed into evidence. Could the government have used Ms. Taverys tax return information against her if she had been compelled to submit it? Of course not, if the Fifth Amendment means anything.
Good grief! What kind of sophistry is this? The Fifth Amendment states:
No person shall be compelled in any criminal case to be a witness against himself, .
This means that no person can be required to provide evidence that would tend to incriminate him, and which could be used against him in a criminal case.
Hello. Anybody home? The information was used against Tavery in a civil case and not a criminal case. No information was being used against anyone in a criminal case. Certainly no information was being used against Tavery in any criminal case. And providing she had not supplied false information on her return, or supplied any self-incriminating evidence of some other kind of criminal act, she had not incriminated herself. Since she did not supply information that would tend to incriminate her, she did not waive her Fifth Amendment rights, contrary to what Conklin claims.
At page 31 of his book, Conklin states:
I am a Communication Expert and have made an extensive study of the morpho-syntax of English. I have a Masters Degree >from the University of Colorado in Communications and I have over fourteen years of experience teaching English and Communications at the elementary, junior-high, high school, and college levels.
Give me a break! Does Conklin not understand the difference between a civil case and a criminal case? Does he not understand the difference between incriminating evidence and information that is not incriminating? (Maybe I should be glad that I only have a Bachelor of Science degree and actually struggled with English, my one and only language.)
I know a lot of people have been led to believe in this Fifth Amendment argument. But these people do not bother to actually study the cases upon which the promoters supposedly rely. By simply believing what someone says a case says has landed a lot of people in jail. Most of these promoters are quite clever at leading people down a primrose path to legally invalid conclusions.
Who are some of the other people who have not only promoted the same kind of flawed information about the Fifth Amendment that Conklin has, but who are also promoting Joe Banister as if he is a wonderful addition to the freedom movement?
Well, Irwin Schiff is one of these people. I personally believe that Schiff has very cleverly led his readers down the primrose path to legally flawed arguments on at least 16 different issues. The flaws in all but one of these arguments are covered in my books and newsletters. The 16th legally flawed argument (among others) is covered in my articles at www.goodbiz.com/tbks.
Other people who are promoting Banister and his issues include Free Enterprise Society of Fresno, California (FES), and a guy named Peyman. It is my understanding that Peyman is charging people $140 to take a class wherein he "teaches" Bill Conklins material. Good grief! For that kind of money, a person can get all three of my books and have $55 left over for a really good meal. It is my understanding that Peyman has also charged a sizable amount to take people to Tax Court. To my knowledge, none of these people has won anything. It is also my understanding that Peyman lost his own case in Tax Court. Other than myself, has anyone asked who elected Peyman the "President" of his own self-concocted so-called "Freedom Law School"? Are there really non-filers who are so gullible that they are influenced by such a titles?
There are even attorneys putting out opinion letters claiming that by filing tax returns one is waiving his Fifth Amendment rights. You should ask such an attorney how many non-filer cases, if any, he has won using the Fifth Amendment as a legal argument for an excuse for an individual to not file tax returns. Has any court, in any "failure to file" criminal case that the attorney has been involved in, ever ruled that the Fifth Amendment provides an individual an excuse to not file tax returns? Ask him.
If this argument had any legal validity, it would require a directed verdict in favor of the defendant in every "failure to file" case. I think these attorneys should know that.
THE SIXTEENTH AMENDMENT: As far back as 1986, in my first book, The Best Kept Secret, "Taxpayer" v. Nontaxpayer", I explained in very simple terms just why the argument that the Sixteenth Amendment had not been properly ratified should not be used as an excuse for not filing tax returns. Even before that, people were getting convicted for using this argument in criminal cases. A number of attorneys were, and I guess still are, unsuccessfully using this argument to defend their clients in "failure to file" cases. This issue is briefly discussed in my articles at www.goodbiz.com/tbks. It is more extensively covered in my books and newsletters.
The reason that the non-ratification of the Sixteenth Amendment does not provide an excuse for not filing tax returns is really very simple. Once you see the reason explained, you will probably wonder why you didnt figure it out for yourself; if you havent already done so. I see no honest, justifiable reason for anyone who has done any research on the issue at all to continue to promote this argument.
I believe the biggest promoters of this legally flawed argument include Banister, the Free Enterprise Society and Bill Benson, along with a few attorneys. What are the real motives of Banister and his buddies?
It appears to me that there is a large group of promoters who are working hand in hand to promote false information to the patriot community. After over 19 years of being a non-filer and studying many, many court cases, I can only conclude that such false information is being purposely perpetrated upon the unsuspecting and often times gullible non-filing individuals.
There is no question in my mind that Banister has teamed up with individuals who have been promoting false information. While I have only touched on small parts of Banisters book, I think I have provided enough information to help the reader start judging this situation for himself.
What you see in this report (message) are my own personal opinions which are based upon my own research and knowledge. It is up to the reader to do his own research and form his own personal opinions.
I would like to know the following:
A lot of people are going to be unhappy over this message. Thats okay. Some of these promoters were mad at me even when I didnt name names, but just pointed out the legally flawed arguments they were promoting.
Probably one of the most difficult things for an individual to acknowledge is that he has been hoodwinked. I really do believe that these promoters have hoodwinked a lot of people.
I invite you to visit my web site at
www.goodbiz.com/tbks. You can print out and STUDY my special articles from that site. You can review the rest of the information that is available. You can also see what other readers have to say about my material.
This battle for freedom requires personal responsibility. The freedom and liberty you save may be your own. It is truly your responsibility to learn to separate the accurate material from the inaccurate material. It is truly your responsibility to separate and weed out the people who are promoting false information. I wish you the best.