Over the past 25 plus years, I have studied, analyzed and debunked literally hundreds of tax protestors and their ridiculous arguments for why nobody has to pay taxes in this country. For a long time, I felt as if I was doing the IRS's job because their strategy was to just ignore the idiots and hope they would just go away. As I constantly explained, the IRS's silence on these matters just lent perceived credibility to their insane arguments. As I've been chronicling, IRS has finally taken a more proactive approach to dealing with tax protestor scammers.

I am still waiting to hear back from Kenny Lizotte as to the IRS book that officially says that nobody has to pay taxes. He was so positive about that in his drunken messages on our answering machine. Of course, no such book exists; so we will never learn that secret from him. He has resorted to a long running tactic used by people in the tax protestor movement; trying to indict us professional tax practitioners as active participants in the massive taxation conspiracy in this country. The list of questions he sent was tiny compared to the ones I have seen in the past, which were often three pages long, single-spaced.

I have no intention of wasting time responding to idiots like Mr. Lizotte. However, I was copied on the following email that a reader sent to Mr. Lizotte. I haven't checked all of the code section citations; but they sound reasonable. However, the name of the sender does seem a bit strange.

From: "D Shyster" shyster1040@hotmail.com
To: kennylizotte@msn.com

Subject: Re: Tax Questions

Kenny:

In reference to your questions to Kerry Kerstetter (posted on http://www.taxguru.net)/ of November 28, 2004, try this on for size:

Section 1 imposes a tax on your "taxable income" which, under Section 63, is the "gross income" under Section 61 less the deductions allowed; thus there is a tax imposed based on your "taxable income"

Section 6012 requires you to file a tax return if you had gross income in an amount greater than the sum of the basic standard deduction and the exemption amount - probably about $10,000 right now, give or take; thus, if you earned more than $10,000 (or whatever the basic standard deduction and the exemption amount add up to), you have to file a tax return, and that return must show the tax calculated under Section 1.

Section 6151 requires you to pay the tax shown on a return if you were required to file that return.

Therefore, the following results: If you had gross income above $10,000 (or whatever the current basic standard deduction plus the exemption amount is) then you must file a tax return showing the tax calculated under section 1; because you have to file a tax return, you must pay the tax shown on that return.

I believe that the foregoing shows:

(1) what code section requires average Americans to pay the income tax - Section 6151 does;

(2) what code section shows the liability of the average American for the income tax - same as before, Section 6151 obligates you to pay the tax shown on your return;

(3) What code section requires Americans to keep books and records - Section 6001 permits the IRS to issue regulations requiring anyone liable for any tax to keep records - which they've done - see Treasury Regulations 1.6001-1 and following (and which will apply to you if you meet the test under Section 6151 because then you'll owe taxes, which means you'll be liable for them);

(4) What code section requires Americans to make a return - Section 6012 does; and

(5) What code section requires the average American to submit to withholding - short answer - Sections 3401 to 3406 do. Long answer - nothing directly; however, Section 6654 does require you to make estimated tax payments on a quarterly basis (i.e., every three months) prior to the date for filing your return - i.e., it's a pay-as-you-go system, and Section 3401 and following requires your employer to withhold from your wages amounts that approximate the taxes you'll ultimately owe on that income, and also gives your employer complete protection from you if you try to sue the employer to get them back. So, the effective answer really is - Sections 3401-3406 do.

Does that do it?

BTW, yes, every little red cent you got for doing work, e.g., wages, or for lending out your money, is included in the term "gross income" - section 861 does not "determine" anything, not your taxable income from sources within the US, nor even whether or not a given activity was a "source" of income - all that 861 does is assign a geographic location to your sources of income - it tells you whether or not a source was in the US or outside the US, it does not tell you whether or not the activity was a source at all. Further, the 16th Amendment was properly ratified and it is therefore part of the Constitution. Even further, Congress has almost unfettered power to tax things - the taxing power is included in the general list of Congress' powers and is therefore of equal dignity with all the rest. That means that it is an independent source of power, and is not limited by the other sources - meaning that Congress can tax purely intrastate income even though it cannot regulate purely intrastate activity that generates that income.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/30/2004 09:22:00 PM Send this post: