Scott & Debra Gillespie - Hendrickson's Heroes

[Famspear]

More lambs to the slaughter: Hendrickson's Heroes, Scott E. Gillespie and Debra J. Gillespie of Milwaukee, Wisconsin are mentioned by Peter E. ("Blowhard") Hendrickson in his latest news release at his losthorizons web site.

The Gillespie crew filed a 2009 Form 1040X amended return using Hendrickson's Cracking the Code tax scam. Their original return apparently showed over $80,000 of income; the amended return is (of course) based on the Hendrickson theory that the income isn't taxable. They claimed a refund of $13,653 on the Form 1040X.

The problem is that the Internal Revenue Service treated the Form 1040X as not being a valid return -- for obvious reasons.

So, the Gillespie family filed a lawsuit, Gillespie v. Internal Revenue Service, in the U.S. District Court for the Eastern District of Wisconsin, case no. 15-cv-00434-LA, to recover the refund.

The problem is that if the Form 1040X is not a valid federal income tax return, it cannot be a valid administrative claim for tax refund, either. And, if it's not a valid administrative claim for tax refund, the Court has no subject matter jurisdiction to consider the Gillespie's claim. The government has filed a response, and that is essentially the current posture of the case.

The Goofy Gillespie Group has filed various papers with the Court containing the usual nonsense -- even citing at least one of Haughty Hendrickson's court losses as a WIN on the subject of the meaning of the word "includes" as that term is used in the statute -- essentially, borrowing Hendrickson's hilarious habit of claiming that the court rulings -- all of which reject his frivolous tax theories -- are somehow rulings that uphold his arguments.

As others have said here in this forum, you can't fix stupid.

[notorial dissent]

And good ole Prevaricatin' Pete seems to know how to attract the really serious ones.

[operabuff]

The problem is that if the Form 1040X is not a valid federal income tax return, it cannot be a valid administrative claim for tax refund, either.

That seems logical but I don't think that it's accurate. The bar for what constitutes a claim for refund for purposes of creating jurisdiction is pretty low. As I recall pretty much all the refund claim needs to do is apprise the government that a claim is being filed and the specifics of what's being claimed. And it needs to be timely filed. No four part Beard test.

[Famspear]

The problem is that if the Form 1040X is not a valid federal income tax return, it cannot be a valid administrative claim for tax refund, either.

That seems logical but I don't think that it's accurate. The bar for what constitutes a claim for refund for purposes of creating jurisdiction is pretty low. As I recall pretty much all the refund claim needs to do is apprise the government that a claim is being filed and the specifics of what's being claimed. And it needs to be timely filed. No four part Beard test.

I did not know that.

EDIT: Anyway, here's part of what the government is arguing in this case:

The Seventh Circuit has held that a return that does not contain any information relating to the taxpayer’s income from which the tax can be computed is not a return. United States v. Moore, 627 F.2d 830, 835 (7th Cir. 1980). It is not enough for a form to contain some income information; there must also be an honest and reasonable intent to supply the information required by the tax code. Id. at 835. Numerous courts have concluded that forms lacking essential financial information do not constitute “properly executed” returns for the purposes of the refund claim provisions of section 301.6402-3(a)(5). See Hamzik v. United States, 64 Fed. Cl. 766, 767-78 (2005) and the cases cited therein.

Plaintiffs’ Amended Return contains zeroes in response to all items except the amount of tax withheld, the overpayment, and the amount that they wanted refunded to them. Plaintiffs failed to supply the information required by law on the Amended Return, and therefore plaintiffs’ Amended Return is not a properly executed return or claim for refund.....

---from UNITED STATES’ MEMORANDUM OF LAW IN SUPPORT OF UNITED STATES’ MOTION TO DISMISS FOR LACK OF JURISDICTION AND FOR FAILURE TO STATE A CLAIM, docket entry 4, June 12, 2015.

EDIT # 2: And, later in the same memorandum:

Because plaintiffs failed to file an administrative claim for refund, plaintiffs cannot establish that this Court has jurisdiction of this action, and the Complaint should be dismissed for lack of subject-matter jurisdiction under Fed. R. Civ. P. 12(b)(1).

[AndyK]

It appears that the Commissioner is treating the 1040X as an invalid return and NOT as an administrative claim for a refund.

As OperaBuff said, it takes little more than a scrawl on the back of a used napkin to qualify as a claim for refund. In fact, the Tax Court seems to bend over backward to accommodate pro se taxpayers regarding refund claims.

However, the courts' attitudes might have changed in light of the spate of quasi-legal tax evader cases.

[operabuff]

There may be some variations among the Circuits. The Treasury Regs. for section 6402 spell out the forms required for a refund claim and what the refund claim must contain including a perjury statement. But IIRC, most circuits allow taxpayers to cure any insufficiencies in form or content after the fact. Hence, the "informal claim" doctrine. Not only used by tax protesters and fraudsters, but also a tool used by large corporations.

But I'll agree that the DOJ attorneys seem to think the standards are identical. And I suppose it's unlikely that the Gillespies will make a good argument to the contrary.

FWIW, part of the rationale for section 6676 was to give the IRS a tool to sanction informal claims. The informal claims are often not on any sort of a return, which makes the section 6662 accuracy penalty inapplicable. So a taxpayer can feel free to file a conservative return and follow up with some informal claims with less than a reasonable basis. If the IRS buys a claim you're in luck. If not, they couldn't penalize you for wasting their time until 6676 was enacted. But 6676 is not a particularly well drafted statute, and Treasury has, I believe, yet to issue regs. The IRS, in turn, has been reluctant to use the penalty, without more guidance.

[Famspear]

On February 3, 2016, the U.S. District Court rendered its decision against "Pro se tax protesters Scott and Debra Gillespie", to use the Court's words.

The Court concluded that the Gillespies' "tax refund claim" was not "an honest and genuine endeavor to satisfy the law". The Court stated that the Gillespies' explanation of the discrepancy between their original 2009 return (showing $82,499 of income) and their "amended return" (showing "$0" income), "references a well-known tax protester theory that numerous courts have deemed frivolous." The District Court then cited several cases, including United States v. Hendrickson, 100 A.F.T.R.2d 2007-5395 (E.D. Mich. 2007).

The Court concluded: "Because plaintiffs' amended return did not evince an honest attempt to satisfy the law, it did not constitute a valid claim and plaintiffs have not satisfied the statutory prerequisites for filing suit." The Court granted the government's motion to dismiss the case.

The Gillespies are trying to appeal, but they want to avoid having to pay the fee for filing the appeal. Today, Friday, March 11, 2016, the District Court concluded that the Gillespies were not entitled to in forma pauperis status, that their appeal was not in good faith, and that they were not entitled to receive a waiver of the requirement that they pay the fee for filing the appeal.

[Gregg]

Out of idle curiosity and utter ignorance, what might the fee be, ballpark?

[.]

$505.

$500 filing fee plus $5 docket fee. Seems to be uniform across Circuits.

[Famspear]

yaaaawwwwwwwnn......

Let's see...

The Gillespie gang ended up paying the $505 fee after all.

The Court of Appeals for the Seventh Circuit has issued an order extending the time for Scott and Debra to file their brief. It's due on June 17, 2016.

The government's brief will be due on July 18.

The Gillespie reply brief, if any, will be due on August 1.

See Gillespie v. Internal Revenue Service, case no. 16-1465, U.S. Court of Appeals for the Seventh Circuit.

[Famspear]

The Gillespie brief is the usual smattering of Hendricksonian evasions, including the Fabulous Felon's doofus argument about the meaning of the word "includes."

for the life of me, I cannot understand why the Gillespies think that this is going to work, when they have to know and realize that it did not work for Pete and Doreen. If the pilot cannot land the plane that he set on fire, why do you think that you can set your own wreck on fire and land it yourself?

[Famspear]

The Gillespie brief is the usual smattering of Hendricksonian evasions, including the Fabulous Felon's doofus argument about the meaning of the word "includes."

for the life of me, I cannot understand why the Gillespies think that this is going to work, when they have to know and realize that it did not work for Pete and Doreen. If the pilot cannot land the plane that he set on fire, why do you think that you can set your own wreck on fire and land it yourself?

I did not post that response but, for some reason, it's showing on my screen as being made by me.



What's goin' on?

[wserra]

Let me guess: it started when Observer tried to quote, but edited instead. Then things really got screwed up. The quoted material - "The Gillespie brief is the usual smattering of Hendricksonian evasions, including the Fabulous Felon's doofus argument about the meaning of the word "includes." - doesn't appear in the thread except as a quote. Probably accidentally edited out. Trying to fix it made it worse, by screwing up the author.

Obs?

[Famspear]

And, just to be clear, this is the verbiage I wrote:

The Gillespie brief is the usual smattering of Hendricksonian evasions, including the Fabulous Felon's doofus argument about the meaning of the word "includes."

This is the verbiage someone else wrote:

for the life of me, I cannot understand why the Gillespies think that this is going to work, when they have to know and realize that it did not work for Pete and Doreen. If the pilot cannot land the plane that he set on fire, why do you think that you can set your own wreck on fire and land it yourself?

I like this latter material, especially the pilot analogy; it's just that it's not my writing.

[The Observer]

Yes, my fault. I thought I had hit the quote button, but must have hit the edit button instead on Famspear's original post.

[Famspear]

Yes, my fault. I thought I had hit the quote button, but must have hit the edit button instead on Famspear's original post.

Whew! I was worried that maybe I had broken the internet.......

[Burnaby49]

Yes, my fault. I thought I had hit the quote button, but must have hit the edit button instead on Famspear's original post.

Whew! I was worried that maybe I had broken the internet.......

No, this is the guy who broke the internet;



See number 4;

http://www.cracked.com/article_24108_aw ... idity.html

[The Observer]

Whew! I was worried that maybe I had broken the internet.......

Well, you did when you released Limerick #624...

[Famspear]

Whew! I was worried that maybe I had broken the internet.......

Well, you did when you released Limerick #624...

Ah, but look on the bright side: The damage has already been done, soooo......

..................more and more limericks couldn't hurt anything, right?

[Judge Roy Bean]

...
Ah, but look on the bright side: The damage has already been done, soooo......

..................more and more limericks couldn't hurt anything, right?

There once was one barrister, Famspear
Who could not resist limericks 'round here.
Since 624 crashed the internet core
625 will be worse we all fear.

Be afraid; be very afraid.