CtC Newsletter example of refund - proof it works?

[jg]

In the newsletter Hendrickson details how George and Sheila S were able to get a refund of income tax plus FICA withheld on 2010 and 2011 returns filed with Form 4852 changing the amount of income to zero.

See http://losthorizons.com/Newsletter.htm#PageOne

Recognizing that he (or she) was dealing with stalwart, resolute and well-educated Americans who take the rule of law seriously and mean to see it prevail, the agent packed up his tent and moved on. The next thing George and Sheila got from the government-- just last week, as it happens-- were two checks for everything claimed for 2010 and 2011, plus interest:
images of refund checks listed next

Hendrickson ends his tale of the victory of George and Sheila with a query.

More, why do we not see articles helping to spread the liberating truth about the tax, so that this enormously important and effective activism goes viral and infects the body politic with a raging fever of liberty and real respect for the people's law? There is nothing that better instructs as to the true nature of the government actually established by the United States Constitution than gaining an accurate understanding of the limited federal tax authority.



Surely it is clear how much of an activating potential is represented by the prospect of a suddenly regaining control of 30-40% of your wealth, coupled with the revelation that previously the same portion of wealth had just been being snookered away by the corrupt exploitation of ignorance! Nonetheless, those articles are not being written.



WHAT AM I DOING WRONG??!!



I am at a loss. I really don't know what more I can do to light these candles.



I've been laboring ceaselessly for these nine long years-- even while in prison for two of them-- to strike the right spark and somehow my efforts are unavailing. So I ask you: What am I doing wrong?



For that matter, why have my calls to those of you already walking the walk to record and send your video and audio testimonials for posting here, and to spread them on the net yourself, fallen on deaf ears? Why have your victory submissions and uplifting and encouraging forum postings gotten so scanty?



What am I doing wrong?



Please. I really want to know.

Anybody care to tell him?

[The Observer]

Here is what you are doing wrong, Pete:

You are assuming that this issue has finally been resolved in George's and Sheila's favor. That is a premature, and most likely, false presumption. You are failing to consider what happened to those disciples of CtC earlier who received refunds only to get notices later on that the IRS was ruling those refunds to be erroneous based on the frivolous position of CtC and were going to assert additional penalties and demand repayment. Those disciples got a sudden and hard lesson that CtC doesn't work and that Pete Hendrickson didn't know what he was talking about.

I wouldn't be surprised to see George and/or Sheila pop up later at LH and complain bitterly about Auntie IRS coming back for the money.

[notorial dissent]

I wouldn't be surprised to see George and/or Sheila pop up later at LH and complain bitterly about Auntie IRS coming back for the money.

That I think is pretty much a foregone conclusion, not if but when.

For some reason, I thought Pete had been enjoined from peddling his prattle, so wouldn't this be a violation of that?

[Famspear]

Pete Hendrickson wrote:

More, why do we not see articles helping to spread the liberating truth about the tax, so that this enormously important and effective activism goes viral and infects the body politic with a raging fever of liberty and real respect for the people's law? There is nothing that better instructs as to the true nature of the government actually established by the United States Constitution than gaining an accurate understanding of the limited federal tax authority.

Surely it is clear how much of an activating potential is represented by the prospect of a suddenly regaining control of 30-40% of your wealth, coupled with the revelation that previously the same portion of wealth had just been being snookered away by the corrupt exploitation of ignorance! Nonetheless, those articles are not being written.

WHAT AM I DOING WRONG??!!

I am at a loss. I really don't know what more I can do to light these candles.

I've been laboring ceaselessly for these nine long years-- even while in prison for two of them-- to strike the right spark and somehow my efforts are unavailing. So I ask you: What am I doing wrong?

For that matter, why have my calls to those of you already walking the walk to record and send your video and audio testimonials for posting here, and to spread them on the net yourself, fallen on deaf ears? Why have your victory submissions and uplifting and encouraging forum postings gotten so scanty?

What am I doing wrong?

Please. I really want to know.

Part of the problem, Pete, is that you do NOT really "want to know". Ironically, you're not aware of the fact that you really do not want to know.

You're not really engaged in an effort to spread "liberating truth" or truth of any kind.

Pete, you have a condition that psychologists and psychiatrists call Narcissistic Personality Disorder, or NPD. This condition is characterized by an infantile, delusional belief that oneself is omnipotent. In your case, NPD exhibits itself in part with your delusional belief that you have discovered "the fascinating truth about taxation in America."

To those who know you personally, Peter, you appear to have an intense, persistent, irrational and really unnatural love for yourself.

In reality, you are not, however, in love with yourself. Instead, you have created a false image of yourself in your own mind. This creative process began when you were very young. You now have an elaborated, detailed, false image of who you are, and you are "in love" not with your true self, but rather with that false image.

You are not trying to "light candles," Pete.

You set personal goals for yourself for the purpose of gaining approval from others. You set your personal standards unreasonably high in order to falsely perceive yourself as being exceptional - exceptional not in the normal ways in which each of us is exceptional at one thing or another -- but rather exceptional to an unrealistic degree. In this regard, you are often unaware of your own motivation.

You have an impaired ability to adequately recognize or identify with the feelings and needs of other people. Your relationships with others around you are largely superficial. You maintain these relationships primarily to enhance your own self-esteem. In large part, you lack a genuine interest in the experiences of others. Your motivation in dealing with those around you is predominantly driven by a desire to enhance your own delusional feelings of superiority.

You have irrational feelings of entitlement. You firmly and perseverantly hold to a delusional, irrational belief that you are better than others in ways that are not reflective of the reality of your situation, and that you have achieved a measure of success that you have not really achieved.

You have in the past made excessive and largely dysfunctional attempts to attract and be the focus of the attention of other people. Your involvement in the anti-tax movement and your two federal prison terms are evidences -- and results -- of these dysfunctional behaviors.

As a person suffering from NPD, you tend to be an under-achiever in some of life's larger processes. Because of your pathological, false beliefs about yourself, you tend to not "try hard enough." Because you do not try hard enough at some of the things that really matter, you do not realize your full potential.

You are largely unaware of your own condition, Pete. You are, as some psychiatrists say, "ego syntonic." It would be difficult for you to overcome your disorder; the nature of the disorder prevents you from seeing your dysfunctional thought processes for what they are.

You have achieved some important successes, Pete. You and your spouse have raised a daughter and a son. You have maintained a long-lasting marriage. You are not without important and impressive abilities -- and potentials.

Your NPD, however, is probably a psychological anchor that has always held you back.

I am not a psychologist or psychiatrist, and someone qualified in those fields may well contradict me. I would tend to defer to the judgment of those so qualified if they disagreed with my assessments. But for whatever it is worth, this is my response to your question about what you are doing wrong.

See:

http://www.dsm5.org/ProposedRevisions/P ... spx?rid=19

EDIT: Much of my analysis is adapted from the proposed draft of DSM-5 (see the material at the linked page).

[fortinbras]

I suspect all of you already know this, but the IRS is so contrived that if a tax return arrives suggesting that a refund is in order - and the return itself is not Conspicuously defective - the IRS clerks dash off that refund check fairly quickly. But later, if more detailed examination shows that the refund was not justified (or was too large), then the IRS will send out letters to get that refund (or part of it) repaid.

Here the CtC was crowing about a large refund received on this past week. True. But a few months down the road, will the IRS come back to take back its money and maybe even demand more? This is a Very Real possibility but CtC doesn't mention that (typical of these tax dodgers, who gladly show their refund checks but clam up about subsequent IRS corrections).

[LPC]

For some reason, I thought Pete had been enjoined from peddling his prattle, so wouldn't this be a violation of that?

No, he was not.

He was ordered to file correct returns for himself, but he was never enjoined (and the IRS never asked that he be enjoined) from promoting his own tax ideas to others.

[notorial dissent]

Well!!! Wishful thinking on my part then I guess.
I would have thought that considering the mess and expense he has cost them that they would have.

So they must just want to keep repeating this particular melordramar over and over then.

[Randall]

Pete, if they truly prevailed, then they have proven themselves to be much smarter than you. Unlike you, again if they truly prevailed, they were able to use your method and not go to prison. Please explain how this could have happened.

[LightinDarkness]

What I find most amusing is that newsletter "tone" seems to indicate a belief that there is some frustrated IRS agent wringing their hands in frustration and saying "I and I would have gotten away with it too...if it hadn't been for you CTC filers!" (as if this were the ending of a Scooby Doo episode).

One thing I cant ever figure out is why the CTC crowd has not yet ascertained that: if the government really was lying about taxes and there was a giant conspiracy to make you pay when you don't have to, it could easily change the law. Why does it not do so yet it continues to put on all this work of a massive conspiracy to make people think they owe taxes? As usual in conspiracies, the big bad evil government is both seemingly all powerful and yet completely stupid.

[Number Six]

I suspect all of you already know this, but the IRS is so contrived that if a tax return arrives suggesting that a refund is in order - and the return itself is not Conspicuously defective - the IRS clerks dash off that refund check fairly quickly. But later, if more detailed examination shows that the refund was not justified (or was too large), then the IRS will send out letters to get that refund (or part of it) repaid.

Here the CtC was crowing about a large refund received on this past week. True. But a few months down the road, will the IRS come back to take back its money and maybe even demand more? This is a Very Real possibility but CtC doesn't mention that (typical of these tax dodgers, who gladly show their refund checks but clam up about subsequent IRS corrections).

Plus the IRS is still using outdated computers and software which makes their job doubly difficult and fuels the chuckleheads' paranoid delusions. I just hope the next Congress will get around to correcting the need for tax reform along the lines of Simpson-Bowles as well as all the structural deficiencies evidenced by CTC and similar ruses that are still working in fooling the IRS systems just long enough to give the gamers false hope. A smart crook who got a six figure check in error would try to get outside US jurisdiction while the getting is good or live in the cash economy like Whitey Bulger, not that hard to do.

[The Dog]

I suspect all of you already know this, but the IRS is so contrived that if a tax return arrives suggesting that a refund is in order - and the return itself is not Conspicuously defective - the IRS clerks dash off that refund check fairly quickly. But later, if more detailed examination shows that the refund was not justified (or was too large), then the IRS will send out letters to get that refund (or part of it) repaid.

How often does it happen that somebody with earnings from a job legitimately has zero tax liability?

If, as I suspect, it is quite rare, wouldn't it be a simple matter to implement a simple review procedure for those cases where a refund of all tax paid is claimed? The cost of this would surely be less than the cost of recovering an erroneous refund.

Admittedly, this would still leave open the loophole of claiming a refund of all but a few Dollars, but happily Hendrickson is fairly unlikely to do that.

[Arthur Rubin]

How often does it happen that somebody with earnings from a job legitimately has zero tax liability?

Been there, done that. Having over $40,000 in medical expenses will do that. Probably $50,000, this year, but I don't have any employment income; some self-employment (on 3 schedule Cs, for what it's worth).

[LPC]

How often does it happen that somebody with earnings from a job legitimately has zero tax liability?

You can get some kind of idea from the IRS Statistics of Income bulletin.

Historical Table 3 has columns that show the percentage of returns in each income group that filed returns that showed no total income tax in the years 2001 to 2010. So, for example, in year 2010, 10.4% of returns with $50,000 to $75,000 of adjusted gross income (18,764,255 returns filed) showed no income tax payable, and 3.4% of returns with $75,000 to $100,000 of AGI showed no income tax liability. In the $100,000 to $200,000 range (14,008,915 returns filed), that number dropped to 0.8%, and for $200,000 to $500,000 of AGI, the percentage dropped to 0.4%. The 0.4% of returns with no income tax is then constant on up into the larger AGIs, including those with more than $10,000,000 of AGI (10,755 returns filed).

We don't know how much of the AGI was earned income (i.e., wages and salaries) and how much was unearned income (interest, dividends, rents, and capital gains), but it's probably an even mixture, because there's no reason for someone with a certain amount of income to have larger or smaller deductions depending on whether the income is earned or unearned.

For those who might not know, "adjusted gross income" is gross income less certain adjustments (such as IRA contributions and moving expenses) but before itemized deductions or personal exemptions, so the difference between AGI and taxable income (and income tax) has to be based on itemized (or standard) deductions, personal exemptions, and credits.

I'm not sure how you can have $10,000,000 of AGI without paying any income tax. You can't explain it through tax-free income because that's not included in AGI, and you can't explain it through capital losses because that's also included in the AGI number. Even charitable deductions are limited to 50% of AGI. And the home mortgage deduction also has an upper limit. We must be talking about some large charitable deductions, together with some monster medical expenses and property taxes, and perhaps some credits for foreign taxes.

[LaVidaRoja]

Don't Henderson -type returns show -0- AGI? If so, that should be a trigger for further review. I realize that a -0- AGI could be triggered by an NOL or by active-rental losses, but I doubt there are large numbers of such returns (and they should probably be screened for math corrections and possible examination anyway)
IIRC, CTC returns show zeroes in everything except for the withholding and the refund claim. Those should be fairly easy to spot when they are input to the computer. (I suspect that these types of returns are generally paper-filed. Trying to e-file something that bogus might be a bit of a problem)

[jg]

Not only was the income section of the return all zeros; but the amount listed as withheld from W-2 on the 1040 was more than the federal income tax listed on the form 4852.

See http://losthorizons.com/EveryWhichWayBu ... 11Docs.pdf
and http://losthorizons.com/EveryWhichWayBu ... 10Docs.pdf
for the copies of returns posted by Hendrickson.

Since this is obviously a Hendrickson style filing what other possible explanation for issuing the refund, other than confirmation of the legality and correctness of the method, can there be?

Obviously, the maintainers of the massive duping of the population, tricking us into claiming to be taxpayers, would never be so inept as to allow this type of filing to go unnoticed, no?

[NYGman]

How often does it happen that somebody with earnings from a job legitimately has zero tax liability?

I'm not sure how you can have $10,000,000 of AGI without paying any income tax. You can't explain it through tax-free income because that's not included in AGI, and you can't explain it through capital losses because that's also included in the AGI number. Even charitable deductions are limited to 50% of AGI. And the home mortgage deduction also has an upper limit. We must be talking about some large charitable deductions, together with some monster medical expenses and property taxes, and perhaps some credits for foreign taxes.

Active Real Estate investments can throw off some wicked depreciation, and can carry tax credits. Between that, and like kind exchanges, you can pay no taxes for years. You can have cash flow, but tax losses, and this is not unusual. It is a fine balance, and leverage plays a part, but there are those in the Real Estate industry that have gone years without paying tax, and don't hurt for money in the least, it really is quite amazing. While I have never seen it, I suspect Trump has a very low if not zero tax rate, or has had many years like that.

[Famspear]

Active Real Estate investments can throw off some wicked depreciation, and can carry tax credits. Between that, and like kind exchanges, you can pay no taxes for years. You can have cash flow, but tax losses, and this is not unusual. It is a fine balance, and leverage plays a part, but there are those in the Real Estate industry that have gone years without paying tax, and don't hurt for money in the least, it really is quite amazing. While I have never seen it, I suspect Trump has a very low if not zero tax rate, or has had many years like that.

Sometimes I think wistfully of The Old Days -- the days before the Tax Reform Act of 1986. Back in "them days," there were no passive loss limitations. No section 469. No Form 8582. Real estate tax shelters were everywhere, and preparing a Form 1065 for a limited partnership that owned a hotel or something like that was kinda fun (in the perverted sort of way that only a tax geek can have "fun").

Or, maybe I'm just "remembering" it all that way......



EDIT: PS: Like kind exchanges are of course a different subject and, after all these years, one in which I still have very little experience.

[webhick]

[there were no passive loss limitations

I honestly read that as "asshole loss limitations."

[Famspear]

[there were no passive loss limitations

I honestly read that as "asshole loss limitations."

On THOSE kinds of losses, there are just no limits!!

[webhick]

[there were no passive loss limitations

I honestly read that as "asshole loss limitations."

On THOSE kinds of losses, there are just no limits!!

I disagree. There'd be a limit of one per person. And the question that should be on everyone's mind: how exactly do you lose it?

And the answer? You somehow manage to get a refund on your CtC return, a couple years later the IRS realizes their error and tries to get your money back and no matter what you do they just keep trying to correct their error - even going so far as to levy your pay and bank account. It is at this point that you pucker so hard that it just disappears. Poof!