Erroneous Congressman's Letter or Erroneous Interpretation?

[Number Six]

I was following a discussion of this letter on an online forum: http://www.losthorizons.com/comment/noticeoflevy.htm

So is this letter accurate or is the interpretation off from what I have seen people on forums assume? Thanks.

[jcolvin2]

The version of the Hertel letter that shows up on the Freedom School website (which appears to be the source of the Lost Horizons document) indicates that the document was created by a Stan Wolcott on July 21, 2003 and that the document was last modified on July 20, 2009.

I can't tell if the document was photo shopped or just pandering. A litigant named Robert Welzel mentions the letter in a rambling complaint in the DC district court, but the resolution of the case appears to be on technical grounds and - while I have not read every docket entry - does not seem to discuss the bona fides of the letter.

[Burnaby49]

In any case even if it was entirely legitimate who cares? It is just a letter from a congressman which means it has, in law, about the same legal validity as the rambling from the drunk who was on my Skytrain car Thursday night. Congress makes law through legislation, not by comments in letters.

[jcolvin2]

In any case even if it was entirely legitimate who cares? It is just a letter from a congressman which means it has, in law, about the same legal validity as the rambling from the drunk who was on my Skytrain car Thursday night. Congress makes law through legislation, not by comments in letters.

Agreed.

Stan Wolcott appears to have been a protestor with losses in the Tax Court (appealed to the 8th Circuit - resulting in $4k in sanctions) and in the Eastern District of Tennessee.

[Number Six]

So probably the Congressman was making an erroneous assertion, this was the letter I saw cited originally, a google turned up Peymon's site and Hendrickson's:



Multiply the number of Congress members and the number of years and you have quite a few that could be off on the law, which errors the anti-tax community latches on to. You would think Hertel, now with the Livingston Group in DC with lots of legal training should have known better.

[Famspear]

.....A litigant named Robert Welzel mentions the letter in a rambling complaint in the DC district court......

Probably the same Robert Welzel discussed here in a Quatloos forum thread, back in 2008. He posted as "rwelzel" for a while at the losthorizons forum at that time. He was an airline pilot who claimed to have flown with Vernice Kuglin.

As noted above, erroneous interpretations of the law -- in a couple of documents that are supposedly letters from U.S. Congressmen -- have no legal significance.

When I see crap like this, I am reminded of something I overheard one day at the Federal Courthouse, downtown here in Houston, many years ago. I was listening to a Federal judge, in open court, discussing some matter in another case, as he asked questions of the attorneys before the bench. It just so happened that the conversation veered briefly into a discussion of the reliability of information on a Federal tax return and, in passing, the judge made a comment to the effect that, well, the tax return had been prepared by a certified public accountant and, therefore, the information in the tax return must have had some measure of reliability, as CPA's "audit" the federal income tax returns they prepare.

Of course, the judge was incorrect. Federal income tax returns are not "audited" by the CPAs who prepare them. The judge probably had no concept of the extent of the procedures that would be involved in an actual "audit" by a CPA.

However, none of the attorneys before the judge made any remark about the judge's comment.



EDIT: To clarify, for visitors to this forum, I am a certified public accountant, and an attorney. I have prepared and reviewed thousands of Federal tax returns over a period of over 35 years, including many returns prepared by CPAs in other accounting firms. Just about the only U.S. Federal returns I have seen that were truly "audited" were returns I prepared myself: Form 5500 returns. Those, however, are technically not "tax returns."

[Famspear]

Just for reference, here are a couple of old threads on Welzel:

viewtopic.php?f=27&t=2927

viewtopic.php?f=27&t=2993

[notorial dissent]

It is possible this is genuine, at least in the sense that it came from some Congresscritter, I've seen them say and send some really world class stupid over the years. That being said, my understanding is that when they are faced with an actual tax question or issue they refer it to the IRS for a response, and they have a unit that does specifically that, or at least they used to, and that is what they Congresscritter generally sends out. I would think that most staffers know to do this just as a matter of course. Howsumever, I think this is more likely in the realm of any number of letters appearing on various sovcit sites I have seen "supposedly" from the IRS saying something totally wrong to a taxpayer request, that have later turned out to be manufactured frauds, which is to say I would put this in the same category as the famous, or infamous, if you will, Trafficant "America is Bankrupt" speech made from the House floor THAT NEVER HAPPENED. Yet that one is still making the rounds to this day.

[AndyK]

Leter amy or net be genuine, but the interpretation IS misleading.

It is totally true that the cited section of the IRC does not provide for levies on private individuals.



BUT


There are other sections which DO give the IRS the authority to do so. The form is mildly misleading in that it only quotes part of the relevant law.

[Famspear]

Leter amy or net be genuine, but the interpretation IS misleading.

It is totally true that the cited section of the IRC does not provide for levies on private individuals.

Actually, the cited section is Internal Revenue Code section 6331(a), which DOES provide for levies on anyone, whether a private individual or not. The second sentence of that provision, which refers to officers, employees, elected officials, of the United States, etc., does not limit the scope of the first sentence.

[Famspear]

This is adapted from something I wrote here in this forum several years ago.

Tax protesters sometimes argue (incorrectly) that section 6331(a), empowering the Internal Revenue Service to administratively levy (that is, to seize or distrain) the assets of a taxpayer, applies only to the assets of "federal workers." The genesis of all this argument about the "federal worker" language in section 6331(a) is a case -- decided over ninety years ago -- that had nothing to do with taxation.

Back in 1912, Congress enacted a law providing for a U.S. District Court in what was then the U.S. territory of the Canal Zone (the Panama Canal Zone). The law provided for a federal judge -- and a salary for that federal judge.

At some point, the judge was provided with living quarters owned by the U.S. government. An officer called the Auditor of the Canal Zone decided -- apparently on his own, as it turns out -- that he had the legal duty or right to withhold, from the judge’s pay checks, an amount to cover the rent for the government-owned living quarters provided to the judge.

The Auditor's action raised some eyebrows. In 1915, the Secretary of War (now, we would say the Secretary of Defense) asked for a legal opinion from the Attorney General as to whether the Auditor was legally entitled to do this.

The Attorney General rendered a legal opinion that the Auditor was not authorized to withhold from the judge’s pay unless a law allowed the withholding. Essentially, the Auditor was engaging in a “setoff” (or “offset”) – offsetting the amount the Auditor claimed was due by the judge to the U.S. government for rent against the salary due by the government to the judge. The Attorney General found no law allowing that offset.

The Auditor was not satisfied with the Attorney General’s opinion, and apparently continued to make the offsets for the rent.

The judge understandably filed a lawsuit to compel the Auditor to stop withholding the rent from the judge’s paychecks.

The Auditor lost the lawsuit -- both at the trial court, and on appeal at the United States Court of Appeals for the Fifth Circuit. Finally, the case went to the U.S. Supreme Court.

In April 1918, the Supreme Court ruled in favor of the judge and against the Auditor. In the absence of a law allowing the Auditor to make the offset, the Auditor would not be allowed to make the offset. The case is Smith v. Jackson, 246 U.S. 388 (1918).

According to the text of the United States Supreme Court decision in Sims v. United States, 359 U.S. 108 (1959), the language of what is now section 6331 regarding an officer, employee, or elected official, of the United States, etc., etc., (I’ll abbreviate this to the “federal worker language”) was added to the tax statutes many years ago because of the decision in Smith v. Jackson. This is another example of emphatic redundancy (or intensive redundancy) on the part of Congress –- purposefully adding what might be considered redundant language to a statute in response to prior court decisions, in this case to make absolutely crystal clear that it is the intent of Congress that the law allow an administrative levy against federal workers, etc. Had the Auditor in the Canal Zone never withheld the pay of that judge, the case of Smith v. Jackson would have never been brought, and it is entirely possible that the “federal worker language” of section 6331 would not be there today.

Congress was concerned because the Supreme Court, back in 1918, had ruled that an offset against a judge's pay was invalid -- in a case where the word “tax” is not even mentioned -- that an administrative levy for a federal tax on the income of a federal worker might be deemed to be an invalid offset covered by the doctrine of Smith v. Jackson. Now, in the absence of the "federal worker" language in 6331, maybe some court or another might view a tax levy as being covered by Smith v. Jackson, or maybe that court might not view it that way. Either way, the Congress simply wanted to avoid the problem and to make clear that federal administrative tax levies are not impaired by the Smith v. Jackson doctrine. Hence, the arguably redundant (i.e., partially redundant) language of what is now section 6331(a).

This illustrates the tendency of many tax protesters to take unfamiliar language in a statute or other legal text and go wild with conjectures and phony, pseudo-legal theories, straining for an argument against the validity of the tax law, etc., etc., without actually sitting down and doing the cold, unemotional, formal legal research needed to determine: (1) why the language is there in the first place, and (2) how the language has been interpreted in actual court decisions.

[Famspear]

Now, here is the first sentence of section 6331(a):

If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax.

Here is the second sentence:

Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official.

Tax protesters such as Peter E. ("Blowhard") Hendrickson essentially interpret the statute as though the first sentence were to read as follows:

If any person DESCRIBED IN THE SECOND SENTENCE OF THIS SUBSECTION liable to pay any tax neglects or refuses to pay the same....

Of course, that's not what the first sentence says, and that's not what the first sentence means. The material in ALL CAPITAL LETTERS is make-believe. Every court that has decided the issue has ruled that the application of the first sentence is not limited to the persons described in the second sentence.

[Gregg]

Just my opinion, but I'd bet the "middle" part of the letter was added by someone other than who wrote the rest of it. Paragraph 1 says "we don't give legal advice, contact a professional" and then paragraph 2 goes on to give not only legal advice, but incorrect legal advice. If it sounds too good to be true etc...

It wouldn't be the first time, you know.

[Famspear]

Just my opinion, but I'd bet the "middle" part of the letter was added by someone other than who wrote the rest of it......

I agree that fakery is a very distinct possibility here.

[Burnaby49]

Just my opinion, but I'd bet the "middle" part of the letter was added by someone other than who wrote the rest of it......

I agree that fakery is a very distinct possibility here.

Please Famspear, you're a lawyer, so at least try to use proper legal terminology. In the words of Supreme Court Justice Antonin Scalia what you are casually referring to as "fakery" is more correctly termed jiggery-pokery.

[Hyrion]

In the words of Supreme Court Justice Antonin Scalia what you are casually referring to as "fakery" is more correctly termed jiggery-pokery.

I agree. It's very refreshing when Judges use common technical terms we can all understand.

[NYGman]

In the words of Supreme Court Justice Antonin Scalia what you are casually referring to as "fakery" is more correctly termed jiggery-pokery.

I agree. It's very refreshing when Judges use common technical terms we can all understand.

quit it with this legalese tomfoolery. It is pure Skullduggery!

[fortinbras]

Here is subsec (a) of 26 USC § 6331:

§6331. Levy and distraint
(a) Authority of Secretary
If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.
(b) Seizure and sale of property ...

This is pretty much the way it looked back in 1985 when the purported letter was written also.
The first sentence of subsec (a) makes clear the IRS authority to levy on all the property and assets of a scofflaw taxpayer. It is the second sentence that says that if the scofflaw is a govt employee/official, the levy can even be made on his govt paycheck.
But it does NOT say that if the scofflaw is a govt employee then the levy can be upon ONLY his govt paycheck - presumably it can be on any and all of his property and assets, however they were acquired.

The point being that the interpretation in the purported letter is just plain wrong.

The penultimate sentence of the letter seems to have a stylistic error of the sort you'd think that a Congressman's office would have learned to avoid: "I hope you find this information useful and [I] regret that ...".
I will say that the typing of this 1985 letter does not look like the high quality word processed typing that was fairly common in the Congressional offices of that time.

[Patriotdiscussions]

I was following a discussion of this letter on an online forum: http://www.losthorizons.com/comment/noticeoflevy.htm

So is this letter accurate or is the interpretation off from what I have seen people on forums assume? Thanks.

Looks right to me.

[Arthur Rubin]

I was following a discussion of this letter on an online forum: http://www.losthorizons.com/comment/noticeoflevy.htm

So is this letter accurate or is the interpretation off from what I have seen people on forums assume? Thanks.

Looks right to me.

It seems to me as if some Congressmen (for those with a politically correct bent, the two letters I've seen there were from male Congresspeople) have incompetent staffs. Whether or not the letters are legitimate, the interpretation has been disproved in court. It should be noted that the first letter only said that paragraph 6331(a) has to be in the notice sent to the employer; that may or not be required, but probably actually occurred.