[net.taxes] Things IRS Won't Tell You #2

alpert@nanook.DEC (10/24/84)

*** Things the IRS won't tell you ******************************* #2 ***

I have run into so many flames and misinterpretations from the original 
posting of this note that I feel compelled to state my position clearly:

	1) I am NOT suggesting to anyone that they should "stop paying"
	   income taxes.  The subject of filing, or for that matter
	   withholding, is obviously related to but NOT THE SAME as
	   the more general question of paying or not paying taxes.
	   We expect certain services from the Government and these
	   must be paid for in some way. However, the present methods
	   of the IRS are so blatantly criminal that the mind rebels 
	   in disbelief!

	2) A careful study of the IRS Code reveals that the individual
	   (contrary to what the IRS has made popular belief) is NOT
	   required to assess him/herself, but that the government is
	   mandated to assess taxpayers and bill them for taxes due.
	   This is being brought out to demonstrate the lies and deceit
	   propagated by this criminal Federal agency, not to try to
	   get anyone to "not pay" taxes.

With that out of the way, we can get on with it...

DISCLAIMER:
The following information is presented for informational purposes only. 
While most of the IRS's actions are blatantly illegal, they unfortunately 
do commit those actions and frequently get away with it (though a surprising 
number of cases are being decided AGAINST the IRS, particularly when the 
people involved have a knowledge of the tax laws). If anyone desires more
information, send mail to ...!decwrl!rhea!nanook!alpert.

>>>>>>> FLAME ON! <<<<<<
 
                * WITHHOLDING AND THE W-4 FORM *

(As a side note, it is interesting that "income" tax "withholding" was
instituted as a "temporary emergency" measure during World War II.)

As we have seen previously, no one can have a taxable income unless
1) the Secretary of the Treasury assesses you and bills you for taxes
due, or 2) you assess yourself.

Since no one on record has received such an assessment from the Secretary,
this means that we have been "voluntarily" assessing ourselves all these
years!  This is what occurs when you file a tax return swearing that you
have taxable income and that you owe a tax.  IF YOU DO NOT ASSESS YOURSELF
IN THIS MANNER, YOU DO NOT OWE A TAX AND CAN LAWFULLY CLAIM "EXEMPT" ON YOUR
W-4 FORM. 

The IRS's own Code has some interesting things to say about withholding...

     Internal Revenue Code section 3402(n)

     Employees incurring no income tax liability. -- NOTWITHSTANDING
     ANY OTHER PROVISION OF THIS SECTION, an employer SHALL NOT BE
     REQUIRED TO DEDUCT AND WITHHOLD ANY TAX under this chapter upon
     a payment of wages to an employee if there is in effect with respect
     to such payment a withholding exemption certificate (in such form
     and containing such other information as the Secretary may prescribe)
     furnished to the employer by the employee certifying that the
     employee --

          1) incurred no liability for income tax under subtitle A
             for his preceeding taxable year, and
          2) anticipates that he will incur no liability for income tax
             imposed under subtitle A for his current taxable year.

     The Secretary shall by regulations provide for the coordination of
     the provisions of this subsection with the provisions of subsection
     (f).

Notice that the law specifically states that your employer is "NOT REQUIRED"
to deduct any taxes from your pay if you submit an "EXEMPT" W-4 form. Also
note that it clearly makes the determination of the employee's tax liability
a matter between the employee and employer "NOTWITHSTANDING ANY OTHER PRO-
VISION" of the IRS code ("this section").

The IRS, in a near-panic due to the increasing number of exempt W-4's being
filed, now ILLEGALLY interferes with the rights of employees who do not
wish to "voluntarily" asess themselves. Despite the clear intent and wording
of section 3402(n), employers are being "directed" to ignore the employee's
SWORN W-4 statement and withhold the maximum amount! In addition, they also
attempt to levy fines for "false" W-4 forms, once again despite the clear
provisions of the laws.

Such actions on the part of the IRS are blatantly illegal! However, IRS
agents are instructed to use illegal tactics at their convenience. The IRS 
Manual Supplement of July 31 1978, discusses how IRS agents should handle
"EXEMPT" W-4 forms...

     "The employer has NO LEGAL OBLIGATION TO INTERVENE WITH THE
      EMPLOYEE. However, the Service has found that in many situations,
      this is the more effective means of correcting an erroneous with-
      holding certificate with the least INCONVENIENCE to all parties."

So although there is no law REQUIRING employers to furnish employee
W-4 forms to the IRS or to change an employee's withholding status, the IRS
gets away with it through the use of fear, bluff, and illegal intimidation.
As a matter of fact, in an A.P. story dated October 31, 1981, Mr. Herbert
Mosher (then IRS District Director for Massachusetts) is quoted as saying:

     "..IRS could not enforce a penalty on employers who refuse to
      cooperate with this policy...But", he continues, "let's face it,
      no employer wants to incur the wrath of the IRS..."

In fact, employers are free to disregard any notices from the IRS intervening
with employees' W-4 forms, and NO PENALTIES CAN BE BROUGHT FORTH. If employers
DO submit to the IRS "directives", they can be subject to Civil law suits
brought against them by their employees (Ref: U.S. vs. Malinowski).  In
addition, IRS agents using intimidation and fear against employers/employees
can be subject to fines and imprisonment for violation of sections 241 and
242 of the U.S. Criminal Code.

There are more details than can be described in this note, but the following
truths are evident:

     1) No one has a legal tax obligation if they choose not to assess
        themselves (unless the Secretary assesses and bills them; I frankly
        wouldn't hold my breath).

     2) If a person does not assess themselves by filing a tax return, they
        can LEGALLY claim EXEMPT withholding status.

     3) The IRS has NO LEGAL RIGHT to interfere with an employee's sworn
        W-4 statement.  An employer CANNOT BE LEGALLY PENALIZED OR FINED
        for failing to honor illegal IRS "directives".

     4) IRS agents who attempt to interfere with the employee's W-4 can
        be criminally prosecuted under section 3402(n).  If they employ
        the use of fear and intimidation, IRS agents may also be prosecuted
        under sections 241 and 242 of the U.S. criminal code. These
        sections provide SPECIFIC PENALTIES for the use of fear and
        intimidation in depriving citizens of their Constitutional rights
        or protections under the law. (They may also be sued civilly for
        financial damages.)

>>>>>> FLAME OFF! <<<<<<


******* Next time: Surprise! No one need submit to an IRS audit! *******


		Bob Alpert

		...!decwrl!rhea!nanook!alpert

NOTE: the information in this note has been compiled mainly from various
      publications of the Tax Reform movement, particularly the works
      of Irwin Schiff.

eder@ssc-vax.UUCP (Dani Eder) (10/29/84)

> The IRS, in a near-panic due to the increasing number of exempt W-4's being
> filed, now ILLEGALLY interferes with the rights of employees who do not
> wish to "voluntarily" asess themselves. Despite the clear intent and wording
> of section 3402(n), employers are being "directed" to ignore the employee's
> SWORN W-4 statement and withhold the maximum amount! In addition, they also
> attempt to levy fines for "false" W-4 forms, once again despite the clear
> provisions of the laws.
> 
     My wife had this sort of problem.  She filed 'exempt'.  The IRS wrote
a letter to her employer (Pacific Northwest Bell) saying her W-4 was wrong
(implicitly calling my wife a liar).  PNB proceeded to withhold on the
basis of single, with no extra allowances.  I also had filed 'exempt', but
if the the IRS ever contacted my employer (the Boeing Company), I never
heard about it.  By the way, we paid a large amount of taxes for 1983, and
expect to do so for 1984.  Last year, it was by check a few weeks before
filing our return.

Dani Eder / ssc-vax!eder / Boeing Aerospace Company / (206)773-4545