There is a lot of confusion about when and how to answer the letters that the IRS sends out to American Citizens. This article is designed to give you the “BIG PICTURE” with the IRS as well as some straightforward answers. However, this short article cannot contain all that would be needed to get the IRS off of your back.
This article will keep you from making the most common mistakes that people make and get you going on the right path. First of all, we recommend that you study the material that We the People Foundation have gathered since 1999 about the illegal inception and operation of the Federal Income Tax. From the First debate that We the People Foundation put together on July 2, 1999, which was aired on C-Span, to the USA Today Ads and the Truth in Taxation hearing. You should study them carefully and understand the issues, even though the government has failed to address them.
There are a lot of baseless legal theories floating around the movement. We did not air those issues because after reviewing them, we found them to be as baseless as the Tooth Fairy and the Unicorn Theories; they all sound good, but were without legal foundation. The most common baseless theories that are promoted out there are:
- Anything having to do with Uniform Commercial Code (UCC)
- Sovereign or State Citizenship theories
- 14th Amendment related theories
- Strawman/redemption theories
- Expatriation/repatriation theories
- Common law versus statutory or admiralty jurisdiction arguments
- Yellow fringed flag argument
- Section 1341 argument
- Not using Zip Code on your Mail
- Buck Act
- Copyrighting your name
- Objecting to your name in CAPITAL LETTERS
- Taxes are based on contracts that government tricked you into entering
- Missing 13 Amendment argument
- Article 3 court argument theory
- Using “C/O” or “non-domestic” in front or back of your address
For a more detailed rebuttal of these and other false arguments, go to the web site of famous freedom lawyer, Larry Becraft to his specific page on DESTROYED ARGUMENTS at http://fly.hiwaay.net/%7Ebecraft/deadissues.htm.
Here comes the “BIG PICTURE”. The Federal Income Tax system is wholly dependant on the American people voluntarilyfilling out 1040 Income Tax Confession Forms (Tax Returns) under oath which gives the IRS all the information that the IRS needs to base a tax on and to collect the tax from you. In the process, you give up many of your rights to the IRS, like your 5th amendment right not to give information that could be used to put you in prison. In fact, the IRS collects over 98% of the money it gets voluntarily, without any forced collection actions http://trac.syr.edu/tracirs/findings/national/collpctG.html.
A former U.S. Senator named Henry Bellmon in 1969 once said, “In a recent conversation with an official of the IRS, I was amazed when he told me, ‘If the taxpayers of this country ever discover that the IRS operates on 90% bluff, the entire system will collapse’!!!”
There are simply too many people in the United States for the IRS to convince that they should file a 1040 Income Tax Confession Form. The latest Population count in 2001 concluded that there are about 280 Million Americans. Back in 1998, IRS took a guess and estimated that back in 1996 there were 63 million Americans “who have not filed a tax return and initially would appear to have a legal requirement to file.” The number of non-filers today is likely over 70 million. In the same document, the IRS admits that they “do not have sufficient resources to work 63 million potential non filers…”
We also know that in 2002, IRS received 132 million individual tax returns. If you divide the numbers, you will see that for every 2 filers there is 1 non-filer in the United States. In addition the IRS has a very limited budget of only $10 Billion, with which it collects $2 Trillion per year. Again, if you divide the numbers, you will see that the IRS spends only 50 cents for every one hundred dollars that it collects!
Therefore, the IRS uses psychology of deception as described by Chinese war tactician Sun Tzu to fool people into giving up their rights and the information the IRS needs to enslave them. According to the investigation arm of the United States Congress, called the Government Accounting Office (GAO), every year, the IRS sends out over 31 million, dumb, computer generated letters to the American People http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=18.104.22.168&filename=gg00084.txt&directory=/diskb/wais/data/gao.
Quite simply, the IRS does not have the money, resources, manpower, and time to train a huge army of agents to write to each of us individually. When you get a letter from the IRS, the IRS wants to give you the impression that an IRS agent is watching you and is awaiting your response, and if you do not answer them, they will come and get you. This is a BIG LIE, that the IRS must have you believe in it, in order to have you surrender your rights and the information, the IRS needs from you under your own oath, to enslave you.
The IRS and it’s boss, the crooked politicians in the United States Congress, refused to debate the Legality of the Income Tax with We the People Foundation’s experts. They publicly admit that they do not have the resources to go after everyone. But the dumb computer generated letters that they send out to the American Citizens never mention this fact. With all the threatening and deceptive language, the IRS tries to trick you into calling the IRS’ toll free telephone number (which gives them your phone number), and then the IRS’ telephone agents are trained to scare you into giving up your rights and the information that the IRS needs, or have you mail information about yourself to enslave you.
Most freedom seekers fall for this trick and write a response to the IRS that only serves to identify the freedom seeker for closer inspection and attack. If you study the IRS’ latest handbook on “Tax Protestors” (what they used to call us, before Congress banned such labeling by the IRS in 1998), which was published in October of 1996, on page 14 it states:
“[non-filer] schemes involve individuals who have never filed an income tax return or have simply stopped filing. These protesters are the most difficult to identify since they do not readily identify themselves by sending protest letters or unacceptable returns. Unless the individual is known to the service, it is extremely difficult to determine if the taxpayer is an illegal protester. You may not be able to identify this taxpayer as a protester, until you actually contact them and request their returns.”
On page 41 the manual states: “Third party contacts or other indirect methods can be used, however, they are costly andtake a great deal of time. Given a large number of protestor cases, these methods are prohibitive.”
On page 38 the manual states: “[Telephone] may be an opportunity to catch the taxpayer off guard… Try to secure some ofthe information you will need immediately. Find out where the taxpayer works, lives, banks, etc.”
IRS has a program called the “Information returns program” http://www.givemeliberty.org/NoRedress/HistoricalDocs/L–SenateFinanceTRXSCRPT4-01.pdf (see pages 55,56), which in year 2000 sent out 1.25 million dumb computer generated letters to non-filers, which means less than 2 percent of non-filers were contacted at all by the IRS. The same program sent6.92 million letters to filers. That means about 70 million non-filers get NOTHING from the IRS. Zip, nada, zero!!!
IRS has eight “Service Centers” that send out these computer-generated letters. ALL of these letters are numbered “form letters” with the same canned language as an insurance solicitation by mail letter; cleverly worded to confuse, deceive and fool you into giving up your rights and to give information to the IRS to use against you.
The form number of these letters is either on the top right or on the bottom left of the first page of the IRS’ canned letter. These letters either have no name of an IRS agent sender, or if they have one, it is a phony name with a phony computer generated signature that is designed to make you think that you got a personal letter by a real person at the IRS who is watching you!
The most common letters are numbered on the top right of the first page CP-515, which is headlined “REQUEST FOR YOUR TAX RETURN,” and the CP-518 which is headlined “YOUR TAX RETURN IS OVERDUE – PLEASE CONTACT US IMMEDIATELY.” Neither the CP-515 nor the CP-518 letter lists the name of a sender. In the top right of the first page they have a bar code just like the one you see in the store on products that you buy. I have seen the IRS send out these two letters to people who have been disabled for years, have been on religious missions outside of the United States for years, as well as to dead people!
IRS is not required by law to send you either CP-515 or CP-518 letters, and you are NOT required by law to respond to them.
The Ogden, Utah IRS Service Center is the most prolific junk mail producer of the IRS and sends out the most CP-515 andCP-518 letters. Ogden sends letters not just to the West Coast, but also to the entire 50 states. I have also seen various Service Centers of the IRS send out CP-515 or CP-518 letters to the same person within the same year about the same “tax year”. This goes to show you how confused the IRS really is!
IRS is like a huge octopus with many, many tentacles, and sub-tentacles, which poorly communicate with each other, and are often in a state of confusion and bewilderment. Ogden has come up with a new letter for a fishing expedition, which at the bottom right of the first page is numbered “Letter 3795”and is essentially the same as the CP-515 letter and contains the phony computer signature of an alleged “Operations Manager.”
Most people who get either the CP-515, CP-518 or the 3795 letter will not get any more letters from the IRS about the same year. A few people will get the “Letter 950”, which again you are NOT required to respond to. Less than 20% of people who receive CP-515, CP-518 or the 3795 letters will receive a “30 day letter”. We have seen 2 kinds of 30 Day letters; the “Letter 1862” and the “LETTER 2566SC/CG” which you will find on the bottom right of the first page of the IRS letter. The “LETTER 2566SC/CG” on top center of the first page calls itself a “PROPOSED INDIVIDUAL INCOME TAX ASSESSMENT”.
What makes these letters “30 day” letters is that if the IRS does not hear from you they MIGHT send you a Notice of Deficiency. The “Letter 1862” on paragraph four of its first page states: “Please respond within 30 days from the date of this letter. If we do not hear from you within this time frame we will issue a Notice of Deficiency. A Notice of Deficiency is a legal notice stating the amount of the proposed tax increase and penalties, and explaining your right to file a petition with the United States Tax Court.”
However the IRS actually sends out the Notice of Deficiency (NOD) in less than 50 percent of the cases that it issues aLetter 1862.
The “LETTER 2566SC/CG” which calls itself a “PROPOSED INDIVIDUAL INCOME TAX ASSESSMENT” claims: “If your contact person does not hear from you within 30 days, we will assess the amount of tax, penalties, and interest shown in our computation based on available income information.” What this means is that the IRS will issue an NOD, which is a tax assessment proposal. Again, in over 50% of the cases, the IRS will NOT issue a NOD.
NOD is the IRS’ OFFICIAL tax proposal that by law (IRS Code, Section 6212) the IRS must send you before they assess (fix or determine) an amount of tax on you. You can and should challenge the NOD by going to Tax Court, other wise you loose by DEFAULT.
If you get a NOD, by law you have ONLY three ways to challenge the IRS’ tax proposal (unless and until We the People wins its Redress of Grievance lawsuit):
- Pay the proposed tax (excluding penalties and interest) and sue the IRS for a refund of your money in the U.S. District Court with a jury trial. Very few people do this, since very few people have the money or are willing to give it up, up front, to get a jury trial.
- Don’t pay the IRS now, but go to Bankruptcy Court down the road. However, Bankruptcy Court can be very complicated and you may not be able to bankrupt some or all of the taxes. This is really a last resort. While you are in the Bankruptcy Court, the IRS can NOT take any of your money.
- Request to Go to Tax Court within 90 days after the issuance of the NOD to challenge the IRS’ tax claims. If the Tax Court rules against you, you can appeal it to the Federal Court of Appeal. While you are in Tax Court, or in Appeal from the Tax Court ruling against you, the IRS cannot take any of your money.
- There is no option number 4, no matter what kind of a great sounding whiz-bang your friend or anyone on the Internet claims. If you don’t go to the Bankruptcy Court or the Tax Court, you have by DEFAULT, chosen the first option; have the IRS take as much of your money needed by force, taking your paycheck and bank account, to satisfy the tax claim of the IRS and then you can sue the IRS for a refund of your money.
I think you would agree that given all the above choices, Tax Court is the lesser evil of the remaining evils. Many experts disagree on how or what to do while you are in Tax Court. That is a more detailed subject that needs to be discussed separately.
If the IRS fails to send you a NOD, you can challenge the IRS’ tax proposal in a “Collection Due Process” hearing with an IRS Appeal officer. If the IRS rules against you, then you can take your case up to the Tax Court. And if the Tax Court rules against you, you can appeal it to the Federal Court of Appeal. During this Process, which may take over 2 or 3 years, the IRS CANNOT TAKE your money.
IRS sometimes attempts to assess (fix or determine) an amount of tax on people without sending them a NOD. If that happens to you, be sure to challenge the IRS within 30 days after you get a “FINAL NOTICE- NOTICE OF INTENT TO LEVY AND YOUR RIGHT TO A HEARING.”
Many freedom law experts believe that IRS can be more easily beat at the Collection Due Process level as opposed to going to Tax court when you get a NOD.
If you receive an IRS Summons, or an IRS Special Agent visits you, you will need some professional help. We suggest that you contact one of the organizations or attorneys that specialize in these issues; however, IRS issues summons against very few people and rarely goes after people to put them in prison for challenging or ignoring the summons. We urge to do respond to the IRS summons cases with competent assistance or representation.
I hope this explanation will help you make better-informed decisions.
Yours in health, justice and freedom,
President – Freedom Law School