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The Moral Obligation of Tax Resistance

29 Jun

I received an email from Alabama attorney, Larry Becraft which pointed to an article on “Bill of Exchange Indictments”. The purpose of that article was to show how many income tax “guru’s” had been recently indicted by the IRS and also to expose some of their tax resistance strategies as invalid. Larry’s entire document is posted at http://home.hiwaay.net/%7Ebecraft/BoEIndictments.html

I’ve taken part of Larry’s document and added my comments. My purpose it so explore the possibility that no matter how many frauds may pass themselves off as tax resistance “guru’s” and no matter how incompetent some tax resistance strategies may be, tax resistance is both a moral obligation and a practical necessity.

Larry begins:

“For too many years, there has always been some party or group promoting the use of some sort of financial instrument to pay “debts” of various kinds. For example, about 10 years ago, some madmen from Tigerton, Wisconsin, offered commercial instruments to pay debts. Since banks only loan credit, these instruments also promised to only pay credit. Slowly this undertaking gathered steam, and within a couple of months was storming the country, with people attempting the buy homes and cars, among many other things, with these instruments. People were rejoicing that this was the “hot” issue and the solution for many. To make a long story short, indictments were returned against many who used these instruments, and the program went down in flames with the indictment of the promoters.

“Thereafter, the Montana Freemen started issuing drafts and BoEs drawn on a closed bank account. I remember people possessing these Freemen drafts “payable” for millions of bux, and they deposited them in their bank accounts and attempted to use them to pay debts. We all know what happened.

“Following this program in 1999 was the “redemption process” started by Roger Elvick, about which I have written elsewhere, as well as an improved version of the “redemption process” promoted by Wrong Way Law. Then, Eddie Kahn and Barton Buhtz started programs advocating that people send creditors (including IRS) “bills of exchange.”

“Barton has been indicted and convicted. . . . So has Eddie Kahn. Barton’s indictment states that the first BoE was tendered on August 6, 2001, yet he was not indicted until September 9, 2005, more than 4 years later.”

The 4-year delay may be due to the fact that the IRS only files (roughly) 1,000 criminal charges (not indictments; each indictment typically includes two or more charges) per year. This rate of criminal prosecution must be weighed against reports that there are somewhere between 20 and 60 million people each year who have jobs, but do not file income tax returns. In theory, all of these millions of “non-filers” may be subject to criminal prosecution, but the IRS can only file (roughly) 1,000 criminal charges against (roughly) 500 defendants each year.

Assuming there were just 20 million non-filers each year and only 500 criminal indictments by the IRS, the odds against being prosecuted criminally by the IRS extremely slim: maybe 1 in 40,000. If the number of non-filers were greater than 20 million, the odds of being indicted would fall further.

These long odds against being prosecuted by the IRS are both good and bad.

On the good side, almost anyone can refuse to file and not be prosecuted criminally. On the bad side, the “chosen 500” who are indicted every year are subject to “selective prosecution”. The IRS is not simply prosecuting the first 500 that show up in a random selection of those who are alleged to have violated IRS law. Thus, if you happen to be one of the “chosen 500” you are headed for BIG TROUBLE.

Tax resistance can be compared to playing Russian Roulette with a revolver that has a cylinder with 40,000 chambers and only one bullet. Odds are, you can safely point that gun to your head a bunch of times without ever finding the one “bullet” in the massive cylinder. But if that “bullet” does come up “with your name on it,” you are going to have a very bad “hair day”.

However, given that the IRS criminal proceedings are selectively prosecuted, you can bet that the tax resistance “gurus” are far more likely to be “selected” than ordinary people. The IRS doesn’t have time or resources to prosecute millions of “small fry”. The IRS will make time to prosecute the “guru’s”. While an average man who refuses to file or pay income tax may have expose himself to one chance in 40,000 of being criminally prosecuted, the average tax resistance “guru” (the guys holding seminars, etc.) are probably facing odds of one chance in three, ten at most, of being prosecuted—especially in the past three or four years.

Lesson: Being a tax resistor is, on average, a relatively safe activity; being an tax resistor “guru” can be extremely hazardous to your health (and the health of those most intimately associated with you).

The 4-year delay between the alleged offense and the ultimate indictment may be due to the IRS having more to do than it can handle and/or the simple fact that the IRS bureaucracy is incapable of quick response.

This delay might also be due to Barton Buhtz employing a strategy that was so close to being legally correct, that it took the IRS four years to find both nerve and legal grounds to attack Buhtz.

Finally, this 4-year delay might simply be due to IRS practice of giving tax resistors enough ”rope” to hang themselves and/or involve or implicate others in an IRS investigation.

Whatever the reason for the delay, one lesson is clear: The fact that a tax resistor has used a particular strategy without precipitating an IRS response for one, two, three or even four years can give rise to the appearance that the strategy was successful and foster an exaggerated confidence that the strategy can reliably stop the IRS. When engage in tax resistance, the “fat lady” never truly “sings”. There is always a chance (however, slim) that you, too, can “selected” to join the ranks of next year’s “chosen 500”.

“Here are some more indictments:

Brent Gross indictment The last of 8 counts charged passing a fictitious instrument. He tendered his BoE [Bill of Exchange] on October 15, 2003, but was not indicted until September 19, 2006, almost 3 years later.”

The IRS apparently defines the “Bill of Exchange” as a “fictitious instrument”. In the 2008 Thompson Indictment, the IRS used the term “fictitious financial instrument”. I would very much like to know the definition(s) of those terms since 1) they appear critical to the indictments; and 2) sound as if they might also describe our current “legal tender” (Federal Reserve Notes).

Clifford Kidd indictment See Counts 2 thru 6. He tendered his first BoE
on August 8, 2003, but was not indicted until Dec. 18, 2007, more than 4 years later. Kenneth Heath indictment See last 2 counts. His BoEs were tendered August 13, 2003 and December 23, 2003, yet he was not indicted until Dec. 8, 2005. Jerry Lahr indictment (extract with some pages taken out to create smaller file) Lahr sent his first BoE on October 3, 2003, and was indicted 4.5 years later on April 8, 2008. See Counts 6 through 10. . . . . More recently, Winfield Thomas has been the subject of a superseding indictment. The first indictment (not posted here) expressly mentioned the book, Cracking the Code, the Theory of Redemption, that advocated this issue. Here is the DoJ press release regarding this case.

“This argument has recently been “refined” by others like Dr. Sam Kennedy. Aspects of this particular program involve the UCC argument, names in CAPS, “accept for value,” etc. After reading explanations of this program, I fail to detect how this “new program” is materially different from the others. People are being advised to tender bonds in criminal cases, so if you wish to read some pleadings by Mike Mason who did so, see:

Mason I (argument about names in CAPS); Mason II (“give ‘em a bond!”); Mason III (ask for Account); Mason IV (“be sure to accept for value”); and Mason V (“take a default”). Mike failed to appear for trial, has a new indictment, and I certainly do not know where he is.

As I’ve written previously, if you are one of the “chosen 500” selected for IRS prosecution, you’re headed for very serious trouble. Mike Mason apparently agrees and has decided that “discretion” (making himself scarce) may be the better part of both “valor” and “tax resistance”. I disagree with that tactic. If you’re going to “engage” the IRS, you must be prepared to “go the distance”. Running away only guarantees a summary judgment wherein you will be convicted without even a chance of making an effective defense.

And while the odds are still in the IRS’s favor if they prosecute you criminally in court, those odds are not as favorable for the IRS as they once were. Fifteen years ago, if you were indicted for some form of tax resistance, the odds were about 999 to one in favor of you being convicted. But over the last decade, juries have begun to warm up to the idea of tax resistance. There have been a growing incidence of jury verdicts that have favored the defense rather than the IRS. Today, if your case goes to court, I’d guess that you have a chance in 20, maybe even 10 of winning. Those are still dangerous odds, but they’re far better than one chance in 1,000.

More, at juries begin to favor tax resistance defendants, each of the few defense victories only serve to more tax resistors. Income tax convictions have little real impact on tax resistors, non-filers, etc.. The resistance to income taxes is not based on simple greed or larceny, but on the conviction that government in general and the income taxes in particular are simply wrong.

What passes for “government” takes too much. All of us, including jurors, know that’s true. When I was a boy back in A.D. 1950, my dad’s total tax burden was about 15% of his gross income. Today, an average American pays at least 55% of his income to local, state and federal taxes. Because my dad kept 85% of his earnings, he could afford to leave my mother stay at home to raise me and my sister. Today, after taxes, a young man keeps only 45% of his earnings. As a result that young man can no longer earn enough to single-handedly support a wife and family. The wife has not be “liberated” to work, she’s been forced to enter the workforce so that her 45% after-taxes income and her husband’s 45% after-taxes income, can combine to roughly duplicate the standard of living my father could generate with an 85% after-tax-income in the 1950s. Result: latch-key kids, day care, gangs, even divorce and all the resulting social chaos that follows.

In fact, most authorities agree that the primary cause for divorce is financial stress. If dad, by himself, or mom and dad together, can’t generate enough income to make ends meet, they tend to divorce. And what is the single biggest source of financial stress in our lives? Taxes. We pay about 55% (maybe more) of our gross income to local, state and federal taxes. That’s over half of our income. We spend more on taxes than we do on food, clothing, shelter, transportation, medical care and everything else. Thus, insofar as financial stress is the primary cause for divorce (and all the resulting social chaos), then our incredibly high tax burden (and the government that imposes that burden) is the principle cause for American divorce.

And government does not intend to cut taxes. Back about A.D. 1994, President Bill Clinton predicted that the next generation of Americans would devote 80% of their income to taxes. Does either political party really care? Will any president, senator or congressman make a serious and effective effort to reduce taxes (and the size of government) so that the people can raise their families? I don’t think so.

Yes, President Bush and the Republicans allegedly “cut taxes” during over the past 8 years, they didn’t cut spending. They simply continued to spend “on credit,” increase the federal deficit and national debt, and leave that debt (and the inevitable higher taxes) to be paid by today’s children. Bush and the Republicans didn’t cut taxes, they merely postponed them—and worse, imposed the obligation to pay for deficit spending on children who couldn’t vote or even understand the consequences of the government’s actions while Bush “cut” taxes.

Thus, government in general and the income tax in particular, is immoral. Rather than acting like responsible adults, our government has sought to impose high taxes on adults and even higher taxes on uncomprehending children.

If I were 21 years old and asked to pay income taxes based on debts that were incurred by my parent’s and grandparent’s generations, I’d look for every opportunity to resist paying those taxes. What moral obligation compels a young man to pay the debts that were incurred by a previously immoral generation? If that young man’s parents, grandparents and government weren’t moral enough to pay their bills as those bills were incurred, what moral obligation remains to compel me to act their surety and pay their bills?

If I had to guess, I’d bet that part of the reason modern juries are growing increasing sympathetic to tax resistors is that the younger jurors increasing sense the enormous injustice and immorality of taking over half of a man’s income to support the government. The implications of bondage, slavery, and even government-induced national destruction are becoming increasingly obvious.

A recent Rand Institute study concluded that the average government employee is being paid twice what he could earn in a comparable job in the private sector. Who do you suppose is paying that “doubled” income to government employees? Answer: Folks who actually work for a living in the private sector. Thus, the man and wife who can’t properly feed or clothe their children are being driven by the financial stress of high taxes to divorce. Why? So government employees can “live large”.

I was recently sued by the Attorney General of Texas. The suit was spearheaded by Assistant Attorney General Raul Noriega. Mr. Noriega drove a Mercedes Benz that was provided by the government and paid for by the taxpayers. I heard AAG Noriega laughing about his Mercedes one day as he explained the car was only supposed to be used when he was driving around the State on government business, but his supervisors told him to just take it home and use it for his personal transportation. I don’t know if AAG Noriega had to pay for his own gasoline, or if that was also paid by taxpayers. I’m sure that the insurance on the Mercedes was paid for by the taxpayers. So—in addition to his normal salary—AAG Noriega also enjoyed the use (perquisite) a Mercedes Benz at taxpayers’ expense.

We have an international balance of payments problem. We import far more than we export. Government should not contribute to this growing imbalance, but in the case of AAG Noriega, government felt compelled to import a Mercedes Benz for his personal use. Apparently, a mere Ford or Chevrolet (which might’ve helped keep some Americans employed) would not have been sufficiently grand for an Assistant Attorney General.

Perquisites for government are not limited to the occasional Mercedes Benz. Government officers and employees routinely enjoy retirement programs that make So-So Security look childish. The alleged “public servants” (governmental employees) are living better than their supposed “masters” (the people). The alleged public servants (fiduciaries for the People) are living better than the beneficiaries they are supposed to serve. That’s a breach of fiduciary obligations and evidence of governmental immorality. And governmental employees aren’t earning their advantages, they’re simply extorting them as “fair share” taxes from the People who actually work for a living and make productive contributions to our nation.

I contend that it is immoral for a government that professes to “serve the people” to force taxpayers to pay for a Mercedes Benz for government officials at a time when many people can barely afford to feed themselves and their children.

“Taxpayers” are similarly called upon to pay to build grand court houses and other “governmental” buildings that are thick with gleaming marble—and also gleaming security devices. The relationship between gleaming marble and gleaming security devices is no accident. The more government taxes us to pay for their “palaces,” the more angry the people become and the more likely the people will finally attack the occupants of the gleaming buildings. The more marble used to build the court house, the more likely its judges will be shot.

Point: If government officers and employees are really concerned about government security, they should lower taxes and restore lost freedoms. Insofar as government imposes taxes that are too great to be endured and seeks daily to strip us of more and more rights, the people will eventually respond, react and seek to either avoid paying those taxes or—if non-violent tax resistance is impossible—precipitate a shooting revolution.

What is a man’s “moral obligation” to pay taxes to a government that, in my lifetime, has reduced this nation from the world’s wealthiest to the world’s biggest debtor? What is the “moral obligation” to pay taxes to a government that has taken the best education system in the world and reduced it to a global laughingstock? What is the “moral obligation” to pay taxes to a government that has presided over the fall from American medical care from the world’s Number 1 to Number 33?

What, pray tell, is our “moral obligation” to pay taxes to a government that won’t even protect our borders from an invasion by illegal aliens that would be regarded as an act of war at any other time and place in Western history?

And what is our “moral obligation” to pay taxes to a government that—like WWII Nazi’s—invaded a foreign country (Iraq) for no valid reason, killed hundreds of thousands of Iraqi’s, and is now handing out no-bid contracts to four of the world’s richest oil companies to process and effectively own Iraqi oil? (You show me the “morality” of the Iraqi War, and I’ll agree that the American People have a “moral obligation” to pay their “fair share” of taxes.)

What is the “moral obligation” to pay taxes to a government that is determined to destroy The United States of America by causing it to be joined into the North American Union (with Canada and Mexico) and then into the New World Order—none of which can be justified by our federal Constitution and all of which can be truthfully described as treason.

Can you think of anything the government does well? Can you think of anything the government has not screwed up? And what is government’s solution to every problem? Raise more tax revenue (or go more deeply into debt) to fund more government. But we’ve been giving government more tax revenue through my life, and the only results have been bigger government, less freedom, a declining standard of living and, arguably, the very destruction of our nation.

Is it unreasonable to suggest that the real solution to the multitude of problems facing the People is to reduce or stop paying taxes to the government that’s destroying this country? If not, then tax resistance is a reasonable and even patriotic act.

Twenty years ago, President Reagan said, “Government is not the solution; government is the problem.” Today, I (and lots of others) say “Government is not the solution; government is not even the ‘problem’; government is the enemy.”

I conclude that while the tax resistance movement may be populated by more than a few “guru’s” whose strategies are incompetent and whose motives may be fraudulent, the movement itself—mass of people involved in tax resistance and hungry for real freedom and tax relief—is driven by the immoral and oppressive nature of our current government.

Yes, some or most of the various tax resistance strategies may be technically absurd. But, absurd or not, those strategies are not only inspired by an immoral and out-of-control government, those strategies are necessitated as acts of self-defense and self-preservation as people struggle to find ways to feed and maintain their families and protect themselves from government extortion.

Tax resistance is not growing because the “guru’s” are increasingly competent con-artist or because the internet allows “crazy” ideas to propagate at the speed of light. Tax resistance is growing because government has become a racket; because government takes too much and gives too little; because the government, itself, is at best immoral and is arguably criminal in nature.

Tax resistance doesn’t spring up out of the political soil like weeds in the Spring. Tax resistance is not caused by “guru’s”; tax resistance is caused by BIG, DESPOTIC GOVERNMENT.

Government would have us believe that we have some “moral obligation” to pay our “fair share” to support government. The truth is that there is no moral foundation for any “free” people to be compelled to pay over half their income to government. The truth is that there can be no moral obligation to support an immoral government.

Our Founding Fathers recognized this moral problem when they drafted the cornerstone of American freedom: the “Declaration of Independence”. That instrument declares, in part,

“That whenever any Form of Government becomes destructive of these ends [securing the people’s God-given, unalienable Rights], it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

The tax resistance movement is evidence that the American people—unable to achieve real tax reductions through the political process—are resorting to “private process” to “alter or abolish” our increasingly destructive government. The American people are trying to “effect their Safety and Happiness” by reducing their taxes to a point where they can still feed, clothe and maintain their families.

Yes, the tax resistance movement may be legally incompetent, but is it nevertheless both necessary and moral.

The Declaration continues,

“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

Note that the Founders went to war against the mightiest nation on earth based on the imposition of a 3% tea tax. Thus, from the Founders’ perspective, it seems obvious that instead of having a “moral obligation” to pay our “fair share” (55% of our income) to increasingly despotic local, state and federal governments—we have a “duty,” a moral obligation, to “throw off such Government, and to provide new Guards” for our (not government’s) “future security”. Thus, We the People have a right, we have a duty, we have a moral obligation to protect ourselves—even against our own government.

Tax resistance is an early, non-violent expression of the People’s growing awareness of the necessity and “moral obligation” to resist immoral and despotic government. So while people like Mike Mason may ultimately make a run for it, and “guru’s” like Barton Buhtz, Eddie Kahn and Winfield Thomas may wind up spending years in prison, the fact is that they each have more in common with the Founding Fathers than anyone occupying office in the current government.

None of these tax resistance “guru’s” are perfect men. I suspect that you can find significant and even embarrassing flaws in each of their characters. But I also suspect that if we could completely evaluate the characters of Founders like Washington, Adams, Jefferson, Hale and Franklin, we might also discover some very serious (and perhaps embarrassing) character flaws. Therefore, insofar as it can be said that Washington, Adams, Jefferson, Hale and Franklin were “heroes,” it is not so unreasonable to say the same about most tax resistors and their “guru’s”.

I’m not suggesting that Buhtz, Kahn and Thomas have the stature of Washington, Jefferson and Adams. But I am suggesting that they are all cut from the same cloth. I am suggesting that the tax resistors who founded this country were moved to fight Great Britain by the same sense of moral outrage (Taxation without Representation) that ultimately motivates today’s tax resistors to defy the IRS. I am suggesting that the only difference between the American tax resistance movements members of A.D. 1776 and of today is that former were willing to shoot, while the latter are (so far) engaged in a purely peaceful, political and paperwork-based resistance.

Somehow, excessive tax-confiscation must and will be stopped or at least dramatically reduced. Today’s tax resistance movement is attempting to achieve that objective by peaceful means. That point should not be overlooked by zealous prosecutors and pro-IRS judges. You judges keep screwing with these tax resistors and they’ll eventually and inevitably abandon their absurd tax resistance arguments and simply pick up a sniper’s rifle.

In the end, learning to litigate is far more difficult than learning to shoot. It takes years of study to become a competent litigator. It takes a few weeks to become a competent rifleman. Tax resistors invest years of their lives learning to litigate based on the hope that the law and questions of right and wrong really matter in our courts. If government finally dashes that hope and people are forced to admit that we can expect no help from our legislators or our courts, we shouldn’t be surprised to see American tax resistors sell their law books that can’t help and buy rifles that can.

Are some of the tax resistance “guru’s” con-artists out to defraud the public? Yep. Some of ‘em.

But what about the government? How many those who work for government as politicians, IRS agents and judges—the folks who advocate and enforce paying income taxes—are also con-artists out to defraud the People? Lots. Maybe all.

So which is worse? A tax resistance movement populated by some private frauds, or a government populated by official frauds? Under such circumstances, where does the moral obligation lie? To pay, or resist paying, income taxes?

The answer’s obvious.

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4 Comments

Posted by on June 29, 2008 in Income Tax

 

4 responses to “The Moral Obligation of Tax Resistance

  1. k.saner

    March 4, 2009 at 7:38 PM

    Hear! Hear! When my take home pay is less than what I pay in taxes, it is time to do something! Working to support fat cat gvt. employees, non-working aliens, people who don’t submit incomes to avoid taxes and still steal our taxes by utilizing all the free programs has gotten to me! It is impossible to save anything for retirement, take trips, make repairs, etc. and driving a Mercedes Benz it totally out of the question!!!!!!!!!! When is it going to end??? What will the gvt/tax base do when there is no one left to tax as the middle income groups will stop working because the take home is not enough to live on? So very sad…a once great country now the clown of the world!

     
  2. LeNor Barry

    April 25, 2009 at 5:15 AM

    Thank you for your excellent writing and eloquent speech. I most love this statement,

    “This delay might also be due to Barton Buhtz employing a strategy that was so close to being legally correct, that it took the IRS four years to find both nerve and legal grounds to attack Buhtz.”

    People are so defeated, I heard on a right wing radio station, “Isn’t it great that in America we are ‘allowed’ to speak freely?”

    Not that it helps! But how KIND of them to ‘let us’ speak!

    I feel as if our eyes have been closed and sealed shut, and the resisters sometimes manage to open one corner of the eye lids to let in a little light, and maybe one day if they continue, we will be able to see and breath, and live, but until then, we are dead – we are blind. The people who resist this madness don’t want things, houses and cars! They want to kick and fight against this crap. They insist on being alive among the dead. Guts is what they have. And I love them. I love them.

     
    • adask

      April 25, 2009 at 11:01 PM

      Thanks very much for your compliments, but thanks even more for your eloquent passion. It is always encouraging to know that there are others who are passionate about liberty.

       
  3. Peter Blau

    February 4, 2011 at 7:22 AM

    Succinctly put Mr. Adask. This mess we are in is do to flipping the only true God the middle finger. We reap what we sow. Besides Americans are fearful, apathetic, and lazy (especially God’s people). To make a long story really short, I know, I have brought the tax situation up to many Pastors and laypeople. None, not one cares to learn nor do anything about it. Comfort and convenience is just way too important. What more can we expect. When God’s own people don’t want to seek the LORD for the truth what then can be done? Ps 11:3

    I am currently reading and enjoying your book ‘The Nature of Money’ very much.

     

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