More unrest at LH

[Thule]

Several of the Lostheads are discussing using Dave Miners plan to "correct" IMFs. Petey himself has dropped by to say that this is snake oil, and won't do any good. But the LHs continue. Seems Petey is losing his touch with the crowd.

Guess it's hard to claim that you possess the one true way to fight taxes, when you've been hammered repeatedly by the courts.

http://losthorizons.com/phpBB/viewtopic.php?t=2152

[ASITStands]

If it continues, it will be time to "purge the forum" again. Fourth time?

And, if Hendrickson purges the forum, will Lostheads leave in droves? You'd think so.

[Imalawman]

If it continues, it will be time to "purge the forum" again. Fourth time?

And, if Hendrickson purges the forum, will Lostheads leave in droves? You'd think so.

Are there actual "droves" still at LH? At most there might be a half a drove.

[Pottapaug1938]

If it continues, it will be time to "purge the forum" again. Fourth time?

And, if Hendrickson purges the forum, will Lostheads leave in droves? You'd think so.

Are there actual "droves" still at LH? At most there might be a half a drove.

Soon, it will be just Petey and his Imaginary Friends....

[Judge Roy Bean]

If it continues, it will be time to "purge the forum" again. Fourth time?

And, if Hendrickson purges the forum, will Lostheads leave in droves? You'd think so.

Are there actual "droves" still at LH? At most there might be a half a drove.

Having "driven" cattle in my youth, IMHO a herd is stationary, a drove is being moved. We moved large herds of cattle in multiple droves.

The term "herd" seems ironically appropriate for the LH sycophants.

[Brandybuck]

Seems Petey is losing his touch with the crowd.

Seems that he wasn't leading the crowd, he was just running slightly ahead of them. Now that they're chasing after a different rainbow, Petey seems left out.

[Dezcad]

Maybe they are just responding in light of PH announcing his latest loss/failed attempt to be heard by SCOTUS.

Did I miss something? When did PH announce his recent loss with the SCOTUS? I hadn't seen anything in the newsletter or forums. Have I overlooked something?

[Dr. Caligari]

Did I miss something? When did PH announce his recent loss with the SCOTUS? I hadn't seen anything in the newsletter or forums. Have I overlooked something?

I just posted a thread on that.

[Famspear]

On 18 September, losthorizons user "CTCWarrior 63" wrote:

Hi!

I got my CP15 letter from the IRS. They did not mess around. They must be behind, took them 60 days. What is the best course of action to take at this point? Any advice would be greatly appreciated. It seems like they are making it harder to get my refund back. .....

http://www.losthorizons.com/phpBB/viewtopic.php?t=2183

(bolding added).

Duuuhhhhhhh........

User "PeacefulKancer" responded on 21 September:

No advice, but I am writing them asking them how they can say I did not file (non-filer) but charge me a penalty for filing.

Peaceful, your understanding of the law is deficient. The IRS is probably saying you did not file a LEGAL tax return. That does not mean that you did not file what purports to be a "return" for purposes of section 6702. Read the statute. Two different concepts, my man. The act of filing a document that involves conduct based on a frivolous position, etc., can certainly be the subject of a section 6702 frivolous penalty, even if that document does not constitute a legally valid tax return.

Another mistake these people make is to argue that they cannot be penalized under section 6702 if they do not state the frivolous position in the return itself. The statute does not require that the wrongdoer actually state the position the return. The test is whether the conduct is based on a position which the IRS has identified as frivolous, etc. See section 6702(a)(2)(A).

[Quixote]

Another mistake these people make is to argue that they cannot be penalized under section 6702 if they do not state the frivolous position in the return itself. The statute does not require that the wrongdoer actually state the position the return. The test is whether the conduct is based on a position which the IRS has identified as frivolous, etc. See section 6702(a)(2)(A).

Their newest move is to ask the IRS to tell them what frivolous position they have taken. I'm not sure if that is part of their never-take-a-position strategy or stems from a subconscious realization that none of them know what their positions are.

[ASITStands]

When the Appeals Officer writes:

I have determined that an issue raised in your hearing request is:

• a "specified frivolous position," identified by the IRS in Notice 2008-14 (for Notice 2008-14, refer to the IRS Internet website at http://www.irs.gov/newsroom/article/0,, ... 19,00.html); or
  a reason that is not a "specified frivolous position," but is a frivolous reason reflecting a desire to delay or impede federal tax administration; or
  
  a moral, religious, political, constitutional, conscientious, or similar objection to the imposition or payment of federal taxes that reflects a desire to delay or impede the administration of federal tax laws

What's a poor tax denier supposed to do? Take a wild-eyed guess?

I'd say the motivation was trying to pin down Appeals to one argument, so that if they decided to seek judicial review in tax court, they might know what to argue or not argue.

I don't think it's so much a part of the so-called "neutral position" as it is trying to pin down the reason why Appeals is rejecting the CDP Hearing or what they're rejecting on the return.

'Famspear' pointed out they mistake what purports to be a return with a legal return.

That's exactly why they are not understanding why their "so-called" return is not a return in the eyes of the law, and why it's being ultimately rejected. Still, they deserve an answer.

I think it would be much better for the tax deniers if Appeals spelled out the reason.

Just my 2¢ while trying to think like a tax denier but lead them out of the wilderness.

[jg]

Have you not seen posters come here and make a vague general statement and when refuted with a specific argument claim that is not their position? Then another position is refuted; but the poster again claims that is not their position. This process goes on for some time until the poster declares victory that no one refuted their (unstated) position.

A taxpayer with a position contrary to the IRS position can not simply report contrarily and expect the IRS to guess why the item is reported in the manner it is on the return. The IRS should not have to try to guess what position is being taken. If they do then the taxpayer will simply claim that is not their position.

Sorry, but the CtC filers know full well they are reporting in a manner contrary to accepted legal definitions. They claim that their wages are not subject to income tax; but adamantly deny that is what they are claiming (since they are claiming that their wages are not "wages").
They know that their filing is frivolous (aka without legal merit) and merely want to evade the fact that what they are trying to do is meritless.

[Famspear]

In a sense, the crooks want to have it both ways; they want to be able to file a purported "return" based on a position that, under the law, is frivolous -- yet they don't want to be pinned down, because they don't want the penalty imposed. So, they challenge the IRS -- essentially, "OK, IRS, tell me what position I'm taking."

Obviously, if the Form W-2 shows $50,000 in Box 1 as gross income and $10,000 (or whatever) in Box 2 as federal income tax withheld, and the taxpayer asserts that Box 1 is really supposed to be "zero" but that Box 2 is correct, and the taxpayer refuses to state his "position" (in the return itself, or in dealings with the IRS) as to why Box 1 should be zero, that is not a tenable position for the taxpayer in trying to avoid the section 6702 penalty. The taxpayer is the one who has the information on the basis of the position the taxpayer took in his return. The taxpayer's attempt to try to play "hide the ball" with the IRS probably won't work -- and it shouldn't work. The taxpayer know darn well what his "position" is or is not. He doesn't need the IRS to tell him what's in his own mind.

[LPC]

When the Appeals Officer writes:

I have determined that an issue raised in your hearing request is:

• a "specified frivolous position," identified by the IRS in Notice 2008-14 (for Notice 2008-14, refer to the IRS Internet website at http://www.irs.gov/newsroom/article/0,, ... 19,00.html); or
  
  a reason that is not a "specified frivolous position," but is a frivolous reason reflecting a desire to delay or impede federal tax administration; or
  
  a moral, religious, political, constitutional, conscientious, or similar objection to the imposition or payment of federal taxes that reflects a desire to delay or impede the administration of federal tax laws

What's a poor tax denier supposed to do? Take a wild-eyed guess?

Why can't the "poor tax denier" simply state his/her own position, and make a concise statement of the issue that he/she wishes to raise?

Is that really so awful? Being required to state your own position?

[Judge Roy Bean]

...
Why can't the "poor tax denier" simply state his/her own position, and make a concise statement of the issue that he/she wishes to raise?

Is that really so awful? Being required to state your own position?

And accelerate the legal process? Heaven forbid!

[ASITStands]

Why can't the "poor tax denier" simply state his/her own position, and make a concise statement of the issue that he/she wishes to raise?

Is that really so awful? Being required to state your own position?

As I understand the 'Cracking the Code' procedure, it's either "correcting" a Form 1099, by "whiting-out" the reported amount and typing in "$0.00" or scanning the document and editing it by computer, or it's entering "$0.00" on Form 4852 and typing something like,

Company provided W-2 which erroneously alleged payments of IRC section 3401(a) and 3121(a) "wages" hereby DISPUTED. I receive no such "wages".

More recently, it's typing something like,

On submitted W2, the payor on line 5 mistakenly characterized my personal payments as "wages, tips, or other compensation." I have calculated the correct amounts in accordance with statutory language.

Admittedly, the accepted procedure has changed from one person to the next, until now, those who are supposedly in the know are advising some sort of "neutral position," which I think really applies to how they respond to IRS correspondence and not filing Form 4852.

Anyway, in light of the above, if the IRS is relying upon Notice 2008-14, what would be so difficult for the Appeals Officer to cite the notice, specifically, and say something like,

Positions that are the same as or similar to the following are frivolous.

• (1) Compliance with the internal revenue laws is voluntary or optional and not required by law, including arguments that:
  e. A taxpayer has an option under the law to file a document or set of documents in lieu of a return or elect to file a tax return reporting zero taxable income and zero tax liability even if the taxpayer received taxable income during the taxable period for which the return is filed, or similar arguments described as frivolous in Rev. Rul. 2004-34, 2004-1. C.B. 619

pgs. 2-4

Or, better yet, cite IRM 4.10.12.1.1,

1. AR. Zero Wages on a Substitute Form: Taxpayer generally attaches either a substitute Form W-2, Form 1099, or Form 4852 that shows "$0" wages or no wage information. A statement may be included indicating the taxpayer is rebutting information submitted to the IRS by the payer. Entries are usually for Federal Income Tax Withheld, Social Security Tax Withheld, and/or Medicare Tax Withheld. An explanation on the Form 4852 may cite "statutory language behind IRC 3401 and IRC 3121" ,or may include some reference to the company refusing to issue a corrected Form W-2 for fear of IRS retaliation.

At the very least, the Appeals Officer would not be responding with a multiple-choice, but still vague, reason for what you're describing as "stating no concise position." It seems to me, the 'Cracking the Code' enthusiasts are taking a position at the point of filing the purported return, while Appeals is acting no better than the tax denier in not stating a position.

It really ain't that difficult! The IRS has a reason. They're just not stating it directly.

EDIT: And, yes, it might actually accelerate the legal process! That would be a good thing.

[ASITStands]

Actually ....

I have determined that an issue raised in your hearing request is:

• a "specified frivolous position," identified by the IRS in Notice 2008-14 (for Notice 2008-14, refer to the IRS Internet website at http://www.irs.gov/newsroom/article/0,, ... 19,00.html); or
  a reason that is not a "specified frivolous position," but is a frivolous reason reflecting a desire to delay or impede federal tax administration; or
  
  a moral, religious, political, constitutional, conscientious, or similar objection to the imposition or payment of federal taxes that reflects a desire to delay or impede the administration of federal tax laws

... is standard operating procedure for Appeals.

The above response is seen in more than 'Cracking the Code' cases.

I'm arguing (if it can be called that) for more clarity in how Appeals handles the legal reason why any particular return or submission is labeled "frivolous," as it might accelerate the legal process, or at the very least, "pin down" the exact reason why there is a dispute.

Instead, Appeals plays this "cat and mouse" game of not stating directly what the reason was for labeling the submission "frivolous," and even when asked, refuses to answer. If the tax denier decides to seek judicial review, there's no stated reason for the determination.

In essence, Appeals has not addressed the underlying arguments. They've simply made a statement, "Your submission is frivolous," but refused to state exactly how it's frivolous.

Since judicial review is designed to litigate the issues addressed in Appeals, and since Appeals didn't actually address the issues, it leaves the legal process with less clarity.

It ain't all that difficult for Appeals to state the exact reason, as I've illustrated!

[The Observer]

It ain't all that difficult for Appeals to state the exact reason, as I've illustrated!

What I fail to see is what Appeals will actually accomplish by doing what you are proposing. I recall several years ago discussions on this site about whether Appeals should be bending over backwards to TPs in allowing hearings to continue when the TP insisted on being allowed to debate the law, tape record the hearing and a number of other time-wasting items that would not result in any change to the outcome of the hearing. Fortunately Appeals has not given in to allowing the TP to disrupt the process which has allowed the process to shorten quickly so that the TP can get into court where their head can be handed to them.

I don't know whether you believe that by Appeals providing a specific reason as to why the TP's position is frivolous is going to result in the TP understanding and accepting the ruling, but if so then you are mistaken. TPs are taking these positions because they believe that citing "magic legal words" or filing phony legal documents is the real way to deal with the "system" as they see it and to prove that they have no tax liability. They have bought into these myths fully and will not give them up until perhaps they are financially broken and/or in jail. And for some of them (Ed Brown, Irwin Schiff, Dick Simkanin, etc) not even that fate has changed their mind. So Appeals putting out a specific reason is not going to deter a TP from their self-appointed fate. All that will do is generate more tortured logic and word-parsing so that the TPs and the hucksters can come up with a new way to explain why that determination does not apply to them.

As for Appeals giving a specific reason so that the rest of the normal world understands why the TP is being frivolous, I think we can perfectly understand why the position was frivolous to begin with and don't need Appeals to favor us with such an explanation.

[Quixote]

It ain't all that difficult for Appeals to state the exact reason, as I've illustrated!

Actually, it would be impossible for Appeals to state the exact reason or even an inexact reason, because Appeals would get involved only if the taxpayer appealed the determination that his return was frivolous, and cited a non-frivolous reason for the appeal.

9. Appeals — All individuals have the right to disagree with Service findings and request the Appeals Office review their cases. Appeals can settle most differences without expensive and time-consuming court trials. However, Appeals can not consider reasons for disagreeing with IRS findings if the reasons do not come within the scope of the tax laws (for example, if disagreement is based solely on moral, religious, political, constitutional, conscientious, or similar grounds (see Publication 1, Yours Rights as a Taxpayer, Publication 594, The IRS Collection Process, and IRM 8.1.1.2.3, No Appeals Conference or Concession on Certain Arguments). Refer to IRM 8, Appeals, for additional information.

10. Internal Revenue Service Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, provides guidance to taxpayers on how to prepare a formal request for appeal when they do not agree with Service findings. It also states that Appeals can not consider reasons for disagreeing if the reasons do not come within the scope of tax law (frivolous arguments).

11. Internal Revenue Service Publication 5 provides that taxpayers may request a meeting or a telephone conference with the supervisor of the person who issued the findings in their case. These informal requests do not require a referral to the Appeals office for resolution; however, this provision does not extend to requests based upon frivolous arguments.

12. Requests for Appeal, based upon frivolous arguments, will not be given consideration and do not require a formal disallowance. Process as follows:

If the taxpayer contact is by telephone, explain the taxpayer's rights regarding account
information and the process for receiving notification of examination actions as well as the
potential repercussions for maintaining a frivolous tax position, e.g., 30/90 day letter with
subsequent assessment of tax and application of IRC section 6702 penalty assessment for
each frivolous tax return or specified frivolous submission.

For Ogden Campus Exam employees working frivolous filings only: If the taxpayer contact is
by frivolous correspondence, destroy correspondence.

13. Requests for Appeal based upon non-frivolous arguments will be given consideration. Refer to IRM 4.4.5.4, Non-Docketed Cases, for guidance.

14. If the taxpayer contact is by telephone, advise taxpayer to submit written request.

IRM 4.10.12.3.7 (rev'd 11-09-2007), §§9-14

In practice, as I recently learned, once the Letter 3176 is mailed, no one with any decision making power will touch the case. At that point. the only way the taxpayer can avoid the penalty is to file a return that the GS-7 tax examiner (TE) working the case recognizes as non-frivolous and withdraw the frivolous claim. (See IRM 4.10.12.4.6.) (Or have a Local Taxpayer Advocate threaten the TE's boss's boss with a taxpayer assistence order.)

[ASITStands]

In practice, as I recently learned, once the Letter 3176 is mailed, no one with any decision making power will touch the case. At that point. the only way the taxpayer can avoid the penalty is to file a return that the GS-7 tax examiner (TE) working the case recognizes as non-frivolous and withdraw the frivolous claim. (See IRM 4.10.12.4.6.) (Or have a Local Taxpayer Advocate threaten the TE's boss's boss with a taxpayer assistence order.)

Well now, that's interesting!

Anyone with a modicum of knowledge (and, I'm speaking among tax deniers) would recognize that if no one with any decision making power will touch the case, and the only way to remove the penalty is to file a non-frivolous return, that's the way to go.

This ought to be more widely known among the tax denier community. I find that some (after they beat their head against the wall enough times) do actually wise up and comply.

Not sure I agree with the first part though.

Actually, it would be impossible for Appeals to state the exact reason or even an inexact reason, because Appeals would get involved only if the taxpayer appealed the determination that his return was frivolous, and cited a non-frivolous reason for the appeal.

We're requiring the tax denier to state a concise position but not doing so ourselves?

Something's wrong with that logic, and it wouldn't hurt Appeals (or any other responder) to state a more exact reason than a multiple-choice quiz left to the tax denier's imagination.

If you're going to publish notices, such as Notice 2008-14, then cite to it specifically. Otherwise, anything you say is up for dispute because of your inexactness and vagueness.