Another Edition of Stupid CTC Questions answered!

[Nikki]

Pete may have "distinguished" those cases, but how did he address the identical case which HE lost?

In his reply brief in support of motion to dismiss the indictment. And footnote 3 of the brief states that a petition of cert. to the United States Supreme Court is pending.....

Where are those pigs when we need them?

Noah: Pete is toast. At best -- absolute best -- he'll beat the criminal charges, but he'll still have to pay several thousands of dollars of taxes, interest, and penalties.

If he's extremely lucky, his daughter will still have a house to live in when all this is over.

[Noah]

Where are those pigs when we need them?
Went to footballs, everyone

Noah: Pete is toast. At best -- absolute best -- he'll beat the criminal charges, but he'll still have to pay several thousands of dollars of taxes, interest, and penalties.

If he's extremely lucky, his daughter will still have a house to live in when all this is over.

Nikki,
True, toast one way or the other, either burnt toast, just toast or toast that escaped the toaster. In Michigan I think there is a homestead exemption that may or may not come into play.

[Famspear]

Where are those pigs when we need them?
Went to footballs, everyone

Noah: Pete is toast. At best -- absolute best -- he'll beat the criminal charges, but he'll still have to pay several thousands of dollars of taxes, interest, and penalties.

If he's extremely lucky, his daughter will still have a house to live in when all this is over.

Nikki,
True, toast one way or the other, either burnt toast, just toast or toast that escaped the toaster. In Michigan I think there is a homestead exemption that may or may not come into play.

There is no homestead exemption with respect to federal tax liens. For more information, please contact Ed and Elaine Brown.

[Nikki]

MICHIGAN EXEMPTION from bankruptcy "Real property including condo to $3500; property cannot exceed 1 lot in town, village, city, or 40 acres elsewhere"
Michigan Compiled Laws, § 600.6023

$3,500

That will certainly protect a lot of Pete's property.

Face it, Noah, in this race, you're backing a dead horse.

[Dezcad]

Where are those pigs when we need them?
Went to footballs, everyone

Noah: Pete is toast. At best -- absolute best -- he'll beat the criminal charges, but he'll still have to pay several thousands of dollars of taxes, interest, and penalties.

If he's extremely lucky, his daughter will still have a house to live in when all this is over.

Nikki,
True, toast one way or the other, either burnt toast, just toast or toast that escaped the toaster. In Michigan I think there is a homestead exemption that may or may not come into play.

There is no homestead exemption with respect to federal tax liens. For more information, please contact Ed and Elaine Brown.

What about 26 USC 6334 (a)(13)(b)? It provides some exemption from levy, at least.

[LPC]

You seem to have missed the half-dozen cases where the government won its suits to recover invalid refunds from CtCers.

Nikki,
No I did miss those cases...Pete distingushed those cases in his motions to dismiss.

Among lawyers (and law students) the expression is "distinction without a difference."

Which means that Hendrickson can "distinquish" all he wants, but the fact remains that he lost and all of his followers have lost and he needs to provide more than fancy footwork to avoid the conclusion that the reason that he lost is that he's wrong.

[The Observer]

What about 26 USC 6334 (a)(13)(b)? It provides some exemption from levy, at least.

Let's see what that code is about:

.

.
.
13) Residences exempt in small deficiency cases and principal residences and certain business assets exempt in absence of certain approval or jeopardy
(A) Residences in small deficiency cases
If the amount of the levy does not exceed $5,000—
(i) any real property used as a residence by the taxpayer; or
(ii) any real property of the taxpayer (other than real property which is rented) used by any other individual as a residence.
(B) Principal residences and certain business assets
Except to the extent provided in subsection (e)—
(i) the principal residence of the taxpayer (within the meaning of section 121); and
(ii) tangible personal property or real property (other than real property which is rented) used in the trade or business of an individual taxpayer.

In short, if Pete owes less than $5,000 in total taxes, penalties and interest, then the personal residence used by him or others is exempt. Otherwise due to the exception provided by subsection (e), the IRS can pursue seizure and sale of the private residence by filing suit in federal district court.

[LPC]

If Pete walks from these charges, it will be most interesting how he deals with the notices of deficiencies that will surely follow.

My understanding is that "notices of deficiencies" are not necessary.

The government already has its judgments in the erroneous refund suits, the appeals have already been denied, and the Supreme Court has already denied review.

The "will surely follow" is already over. Hendrickson has lost, and the judgments against him are final.

[Dezcad]

What about 26 USC 6334 (a)(13)(b)? It provides some exemption from levy, at least.

Let's see what that code is about:

.

.
.
13) Residences exempt in small deficiency cases and principal residences and certain business assets exempt in absence of certain approval or jeopardy
(A) Residences in small deficiency cases
If the amount of the levy does not exceed $5,000—
(i) any real property used as a residence by the taxpayer; or
(ii) any real property of the taxpayer (other than real property which is rented) used by any other individual as a residence.
(B) Principal residences and certain business assets
Except to the extent provided in subsection (e)—
(i) the principal residence of the taxpayer (within the meaning of section 121); and
(ii) tangible personal property or real property (other than real property which is rented) used in the trade or business of an individual taxpayer.

In short, if Pete owes less than $5,000 in total taxes, penalties and interest, then the personal residence used by him or others is exempt. Otherwise due to the exception provided by subsection (e), the IRS can pursue seizure and sale of the private residence by filing suit in federal district court.

The $5,000 figure is only applicable to 13(A) and not (B) (residence versus principal residence ). But I agree that subsection 6334(e) may provide an exception to the exemption provided by 6334 (a)(13)(b). But to say that there is no "exemption" from levy for a principal residence is inaccurate.

Subsection (e) is not self-executing either and requires judicial intervention:

(e) Levy allowed on principal residences and certain business assets in certain circumstances
(1) Principal residences
(A) Approval required
A principal residence shall not be exempt from levy if a judge or magistrate of a district court of the United States approves (in writing) the levy of such residence.
(B) Jurisdiction
The district courts of the United States shall have exclusive jurisdiction to approve a levy under subparagraph (A).

[Famspear]

What about 26 USC 6334 (a)(13)(b)? It provides some exemption from levy, at least.

Let's see what that code is about:

.

.
.
13) Residences exempt in small deficiency cases and principal residences and certain business assets exempt in absence of certain approval or jeopardy
(A) Residences in small deficiency cases
If the amount of the levy does not exceed $5,000—
(i) any real property used as a residence by the taxpayer; or
(ii) any real property of the taxpayer (other than real property which is rented) used by any other individual as a residence.
(B) Principal residences and certain business assets
Except to the extent provided in subsection (e)—
(i) the principal residence of the taxpayer (within the meaning of section 121); and
(ii) tangible personal property or real property (other than real property which is rented) used in the trade or business of an individual taxpayer.

In short, if Pete owes less than $5,000 in total taxes, penalties and interest, then the personal residence used by him or others is exempt. Otherwise due to the exception provided by subsection (e), the IRS can pursue seizure and sale of the private residence by filing suit in federal district court.

The $5,000 figure is only applicable to 13(A) and not (B) (residence versus principal residence ). But I agree that subsection 6334(e) may provide an exception to the exemption provided by 6334 (a)(13)(b). But to say that there is no "exemption" from levy for a principal residence is inaccurate.

Subsection (e) is not self-executing either and requires judicial intervention:

(e) Levy allowed on principal residences and certain business assets in certain circumstances
(1) Principal residences
(A) Approval required
A principal residence shall not be exempt from levy if a judge or magistrate of a district court of the United States approves (in writing) the levy of such residence.
(B) Jurisdiction
The district courts of the United States shall have exclusive jurisdiction to approve a levy under subparagraph (A).

Another wrinkle: Section 6334 arguably applies only to administrative levy, right? Even the court approval that is referenced in this statute is in reference to court approval of an administrative levy -- a levy by the IRS.

By contrast, if the government obtains a court judgment against the taxpayer and then seeks an execution of that judgment, then the $5,000 rule would not apply. In this situation, the government could seize a residence even if the tax owed is less than $5,000. At least that's the way I'm thinking it works.

Does anyone know whether this is correct?

EDIT: PS, I don't know that anyone is saying that there is no "exemption" from an administrative "levy." What I am saying is that there is no exemption from the federal tax lien -- certainly no homestead exemption from the federal tax lien.

[LPC]

We should remember that the government already has a judgment against Pete (et uxor) for about $20,000, plus interest, and judgments usually act as an immediate lien on all real property within the state.

I don't think that the government will be foreclosing on the judgment any time soon, for the simple reason that the property is not going anywhere and they're focused on the criminal trial now, but I imagine that once the criminal trial is over, the IRS will return its attention to assessing and collecting whatever taxes are found to be owed. (And because Hendrickson filed fraudulent returns, the statute of limitations on assessment is much longer--seven years I think.)

[Dezcad]

We should remember that the government already has a judgment against Pete (et uxor) for about $20,000, plus interest, and judgments usually act as an immediate lien on all real property within the state.

And that is only for one tax year. He faces substantial liability (taxes, penalties and interest) for all the other years. His downfall has only just begun.

[jcolvin2]

(And because Hendrickson filed fraudulent returns, the statute of limitations on assessment is much longer--seven years I think.)

There is no statute of limitations in the case of fraudulent returns or willful attempts to evade tax. In such cases, the tax may be assessed at any time. 26 USC Sec. 6501(c)(1) and (2).

If there is a 25% omission of an item of gross income, the statute of limitations is six years, rather than three years. 26 USC Sec. 6501(e)(1).

[The Observer]

Another wrinkle: Section 6334 arguably applies only to administrative levy, right? Even the court approval that is referenced in this statute is in reference to court approval of an administrative levy -- a levy by the IRS.

This code section caused a number of headaches for IRS and DOJ in determining exactly what Congress intended when they revised seizure/sale procedures regarding personal residences. Should the revenue officer prepare an administrative levy and have it presented in an ex parte hearing for approval? Or did the law intend for the taxpayer to have the right to appear in court to contest the seizure? If so, did this mean the court would take on the responsibility of administering the seizure and sale or would this be remanded back to the IRS to handle? In the end DOJ decided to be conservative and directed the IRS that all residential seizures be handled by filing a suit to enforce the federal tax lien against the property in question. Whether this actually is what Congress envisioned is certainly an arguable point, but the overall intent of ensuring that the IRS decision gets blessed by the judiciary is covered.

By contrast, if the government obtains a court judgment against the taxpayer and then seeks an execution of that judgment, then the $5,000 rule would not apply. In this situation, the government could seize a residence even if the tax owed is less than $5,000. At least that's the way I'm thinking it works.

Does anyone know whether this is correct?

I would have to agree that theoretically it should work, but I am not sure how an appeal court would look at the issue. Is the intent of the law to prevent private residences from being sold to resolve trvial tax amounts? And does this intent more important than the law that allows judgements to be executed?

EDIT: PS, I don't know that anyone is saying that there is no "exemption" from an administrative "levy." What I am saying is that there is no exemption from the federal tax lien -- certainly no homestead exemption from the federal tax lien.

Agreed, I didn't get the impression that anyone was claiming there were no exemptions from adminstrative levy. Heck, the title of 6334 is "Property Exempt From Levy". And I agree that the issue of the homestead exemption applies to the priority of the federal tax lien. But too many people get the words "levy" and "lien" mixed up far too frequently.

[Quixote]

There is no homestead exemption with respect to federal tax liens.

At this point, of course, there is no federal tax lien against Hendrickson, just a judgment lien. A federal tax lien won't exist until tax is assessed. IRS is apparently waiting for Hendrickson to file those corrected returns as ordered by the court, to make the assessment.

[Gregg]

My own favorite pet crackehead, Kensei, has weighed in to congratulate the guy who got his "Victory" check and I just can't keep it in...

Rock and roll. That is great. Our turnaround time has been, shall we say, less punctual. But upon receiving transcripts, records, etc., it shows things have been "changed" in them. And not by us. The lady at ACS said, "wow, your account looks like one big error - and it looks like it is on our end..." Thank you, we agree. That is part of our petition, to correct the multiple errors and jive the account data exactly with the 1040 we DID file, and WAS married joint.
for the love of bob, will someone please tell these idiots that when they send in a CTC return, the IRS does not process it, and there is no grand conspiracy of them loosing the returns, they just give them the attention they're due, which is, none

Once again congratulations, in the words of John Travolta, "Ain't it cool?" (well, that was just after Christian Slater said, "You're out of your mind.")

Calling you out of your mind is an insult to mentally ill people

Now that you have that refund, continue to study and build upon your knowledge. Read through CTC again, you will notice things you may have overlooked the first time. Check out the newsletters too, the EWWBL and things like that, it is always best to keep learning. You can hand out info cards or pamphlets to help, or even if you buy at least 6 books they are cheaper than one at a time. Holy cow, I hope that didn't sound like an infomercial, ha
ha.
it did, and a bad one at that

And be sure to come back after you get a $5000 penalty for filing a fraudulent return to get a refund you were more than likely to get some if not all of without committing a felony. (He was an 18 year old kid working part time, so he couldn't have owed much in any case)

Then, after some general crying from people about how they're not getting any luck with their own "CTC Educated" returns that are in various stages of ruining their lives, Kensei jumps back in with some more stellar advice

EC, is that Letter 1058? The FNOITL, which says you can request a CDPH within 30 days of the date on the letter? You want to do that as it holds any levy action until after the hearing and the result is determined. Also, this enables a "standard" CDPH (you don't want "equivalent" one) which is APPEALABLE. I thought at first that simply writing a letter would fix things but they ignored it. So we sent request, and for amended return as well.

Your letters are gonna get much better reviews when you quit writing them in gibberish (and in red sharpie, as I swear he mentioned earlier in the thread

Be SURE to have proof of timely mailing and receipt. For an amended return CDPH request we sent, they just denied it and said we "sent it too late." Total BS. So recently sent proof of timely mailing and receipt. Waiting on reply.

I have a feeling these facts as presented here involve considerable spin

Barry Smith (Legal Bear) has CDPH info files, and Clarkson/Patriot Network has a Due Process of Law DVD as well. If you go to IRSZOOM dot com they have a great breakdown of the whole IRS processes... gdude, calyxion, us, netgazer, MNryan, etc. have or are currently pursuing CDPH things. Also macwildstar. And others.
Gee, and EVERY ONE OF YOU is winning, right? oops

And does anyone worry that on the site that proclaims Pete the worlds foremost tax expert, how many days have gone by since the government finally has driven a stake into the heart of his civil case, upon which all this is based?

[Imalawman]

And does anyone worry that on the site that proclaims Pete the worlds foremost tax expert, how many days have gone by since the government finally has driven a stake into the heart of his civil case, upon which all this is based?

By that, of course, you do mean "proven beyond doubt that Pete Hendrickson was correct and we're too afraid to address it head on"?

[grixit]

There was a charasmatic leader of a jewish sect, some say cult, who proclaimed that the Messiah was coming soon and hinted broadly that it was him. He's been dead over 10 years now but hopeful followers still watch his grave.

Of course they aren't putting themselves in danger of criminal conviction.

[Prof]

There was a charasmatic leader of a jewish sect, some say cult, who proclaimed that the Messiah was coming soon and hinted broadly that it was him. He's been dead over 10 years now but hopeful followers still watch his grave.

Of course they aren't putting themselves in danger of criminal conviction.

Rabbi Schneerson of the Hassidim. I understand that his followers still maintain a vigil over the grave in Brooklyn(?).

[Gregg]

Ya know, Kensei is running a little close to the edge by mentioning all those others gurus, Pete is like the Hebrew God, with whom he shares a First Commandment.

I am the Lord your God, who brought you out of the land of Egypt, out of the house of bondage. You shall have no other gods before Me.
Exodus 20:2

I am the Lord your God, who brought you out of the land of Taxation, out of the house of federal priviledge. You shall have no other tax gurus before Me.