IRS Double-speak at work
Gwen A. Krauss a Washington IRS employee wrote the following letter to United States Senator Dianne Feinstein on April 30, 1996. The letter is a masterpiece of doublespeak. The text of the letter follows with my analysis in parenthesis.
Dear Senator Feinstein:
This is in response to your letter, dated March 18, 1996 concerning the relationship between the Fifth Amendment privilege against self-incrimination and information a taxpayer discloses on an income tax return.
Although our tax system is based on voluntary self-assessment, paying taxes is not optional. There are specific provisions of the law which require the filing of a tax return, the payment of income tax, and penalties for non-compliance. (Note that the IRS states that the system is based on voluntary self assessment. It is true that the IRS may assess and collect against individuals by seizure and levy, therefore, the payment of taxes is not voluntary if the IRS makes an assessment.)
The Internal Revenue Code requires these actions in numerous sections such as:
*Section 6702 entitled "Time for Filing Income Tax Returns";
*Section 6091, entitled "Place for Filing Returns or Other Documents;"
*Section 6151, entitled "Payment and Notice on Demand;"
*Section 6651, entitled "Failure to File Tax Return or to Pay Tax;" and
*Section 6663, entitled "Imposition of Fraud Penalty."

(It is interesting to note that the IRS has not quoted a section that requires the filing of a return in the above sections. Is that an oversight, or would it contradict the IRS contention in the previous paragraph that we have a "voluntary self-assessment" system?)
Internal Revenue Code Section 7852(3), entitled "Other Applicable Rules," and the Privacy Act Notice of 1974, which enacted Section 552 of Title 5, "Government Organization and Employees," in no way contemplate criminal action. The Miranda Warning, on the other hand, is a specific warning to an individual that he/she may be charged with committing a crime and any information provided after the issuance of the warning may be used against that person. (The IRS alleges that the Internal Revenue Code and the Privacy Act Notice do not "contemplate" criminal action. I am not sure what the IRS means by that, but the fact remains that the Privacy Act Notice warns individuals that information on tax returns can be given to the Department of Justice. DOJ would ask for information on tax returns if they were "contemplating" criminal action. The fact as to whether the Privacy Act Notice and the Internal Revenue Code "contemplate" criminal action is completely irrelevant to the issue. You might note that the Internal Revenue Code does have criminal provisions.)
The Fifth Amendment privilege against self-incrimination protects a person from being incriminated by his own compelled testimonial communications. Fisher v. United States, 425 U.S. 391, 409 (1976). However, the Fifth Amendment does not apply unless the government is seeking testimony that will subject the provider of the testimony to criminal liability. Garner v. United States, 424 U.S. 48 (1976). (The Garner case also ruled that a tax return is a compelled testimonial communication. The government can use the information on tax returns in criminal cases. By requiring individuals to give information on 1040 returns, the government, should it decide at any point in time to use the information criminally, will subject the provider of the testimony to criminal liability. Note that the IRS will not offer to provide any individual with a promise that the information on the return will NOT be used criminally. Furthermore, the courts have ruled that the 5th Amendment applies in civil cases if the information could be used criminally. That is why the IRS cannot enforce a summons in the face of the Fifth Amendment.)
The requirement to file an income tax return is primarily designed to facilitate revenue collection, not criminal prosecutions. Therefore a taxpayer may not rely on the Fifth Amendment privilege to refuse to disclose any information on an income tax return or to refuse to file a return. United States v. Sullivan, 274 U.S. 259 (1927). While a valid claim of the privilege can be asserted as to specific items of information requested on a tax return, it does not give a taxpayer the right to withhold information if disclosure of such information would not incriminate or tend to incriminate him. United States v. Schiff, 612 F.2d 73, 77 (2d Cir. 1979); See also, Garner v. United States, 424 U.S. at 656.
For example, a taxpayer refusal to supply information request on a tax return which is motivated by a desire to protest taxes rather than a fear of incrimination will not be protected under the Fifth Amendment privilege. United States v. Neff, 615 F.2d 1235, 1240 (9th Cir. 1980). (The IRS however, may turn a revenue collection case into a criminal case at any point in time and they may use all the information criminally that they have collected up to that point in the civil case. Notice that the IRS admits that a valid claim of privilege can be asserted as to specific items of information. The problem here is that individuals cannot be held to the standards of an attorney so they cannot be presumed to know whether or not a piece of information will incriminate them or not. Therefore, the government cannot require the disclosure of information on a 1040 return unless it can promise the individual that it will not be used criminally.
It is true that you cannot refuse to disclose information because you are protesting taxes. You should also not refuse to disclose information to the IRS on the return for purposes of the Fifth Amendment. The proper method is to request that the IRS promise you that no information will be given to the Department of Justice or any state agencies for use in a criminal case and to ask for an extension of time to file the return until the IRS can assure you that you are not waiving your Fifth Amendment Rights when you file the return. This is not legal advice, so I suggest that you consult with an attorney before taking any actions on my thoughts)
More importantly, a taxpayer is not entitled under the Fifth Amendment to file tax returns which fail to supply information from which tax liability
can be calculated or contain no information other than a general objection based on the Fifth Amendment. Such a return does not constitute a tax return as required under the internal revenue laws and therefore can give rise to a charge of failing to file a return, to which the Fifth Amendment will not be a defense. See, Ueckert v. Commissioner, 721 F.2d 248 (8th Cir. 1983); United States v. Irwin, 651 F.2d 198 (10th Cir. 1977) certdenied 434 U.S. 1012 (1978); United States v. Silkman, 543 F.2d 1218 (8th Cir. 1976 (per curiam), cert. denied 431 U.S. 919 (1977), United States v. Neff, 615 F.2d 1235 (9th Cir. 1980). (The actual fact is that the IRS will give you a penalty if you file a return and claim the Fifth Amendment on the return. That is why it is better to file a request for an extension of time to file and request that the IRS assure you that they will not use any information criminally. The IRS claims that you must supply information to calculate a tax liability. The problem is that the IRS is ignoring the case of United States v. Doe, United States Supreme Court, 1984. The Doe case took the position that if you admit to having records, you waive your Fifth Amendment Rights. According to Doe, the Fifth Amendment does not apply to records, it only applies to testimony. Therefore if you admit to an amount of income and sign the return under the penalty of perjury, you have admitted that you have records. Under the current law, the mere admission that you had income implies that you have records to substantiate that income. It is manifestly obvious therefore, that you waive your Fifth Amendment Rights by admitting to an amount of
income.)
The Fifth Amendment does not permit a taxpayer to assert a "blanket" objection to all items on a tax return or even an objection to specific items. To validly claim the privilege with respect to a specific item of information on a tax return, the claim must be based upon a real possibility that submitting answers will subject the taxpayer to criminal prosecution. United States v. Irwin, 561 F.2d at 201. the danger of self-incrimination from disclosure of such item must be real and appreciable, not remote and speculative See, Marchetti v. United States, 390 U.S. 39, 48 (1968); Rogers v. United States, 340 U.S. 367, 374 (1951).
However, the taxpayer is not the final judge as to whether specific information would tend to incriminate him. If the claim is challenged, it is for the courts to decide whether a taxpayer refusal to answer specific questions on a tax return is justified. United States . Neff, 615 F.2d at 1240; See also, Hoffman v. United States, 341 U.S. 479, 486 (1951). (Note here that the IRS admits that the taxpayer may assert the Fifth Amendment if there is a real possibility that submitting the answers will subject the taxpayer to criminal prosecution but says the IRS, the taxpayer is not the final judge of the issue, it must be decided by the courts. It seems that the only way to know if the Fifth Amendment can be used is for it to be asserted by the taxpayer and later ruled on by the courts. Since the IRS immediately classifies all individuals who worry about waiving their Fifth Amendment Rights as Illegal Tax Protesters, and since the Illegal Tax Protester designation is a project of the Criminal Investigation Division, it is no problem for a taxpayer to meet the requirements in Marchetti, supra. Furthermore, how is the individual to know if a piece of information may be incriminating if only the courts are allowed to make that decision?)
Accordingly, the Fifth Amendment cannot be raised in a blanket fashion on a tax return. If the taxpayer discloses information on the tax return instead of claming he privilege on the tax return, his disclosures will not be considered "compelled incrimination" within the meaning of the Fifth Amendment. Garner v. United States, 424 U.S. at 665. Because no blanket Fifth Amendment claim arises, there is generally no "waiver" issue present when a taxpayer files a return. (This paragraph is complete "poppycock." The IRS is saying that if a taxpayer discloses information on a tax return, then the disclosure of that information is not required which is consistent with the allegation in the beginning of the letter that we have a voluntary tax system. The IRS then says that if no Fifth Amendment claim arises, there is no waiver of rights when a taxpayer files a return. Does that mean that if the taxpayer does't raise the Fifth Amendment issue, he doesn't waive his Fifth Amendment Rights? Can you waive your Fifth Amendment Rights without knowing that you are waiving them? )This response does not provide guidance on whether or not the Fifth Amendment privilege may be claimed by you with respect to any specific item requested on your tax return. If you wish to claim the privilege with respect to a specific item on your tax return, we suggest that you contact an attorney who may better advise you on your particular situation. (This final part of the argument essentially admits that there is, in fact, a Fifth Amendment problem with the income tax).
I trust you will find this information helpful in responding to your concerns. If we can be of further assistance pleas do not hesitate to contact us. Sincerely, Gwen A. Krauss, Department of the Treasury, IRS, Washington, D. C. 20224.
Dear Willie

I am going to file a request for an extension of time to file a return on April 15, 1996 instead of a tax return. Could you review your thoughts on this issue? I am an employee and I allowed withholding. If I were to file a return, I would get a refund of .00.
Sincerely,
Ready-to-Go
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Dear Ready:
You are asking a good question at the right time. If you follow all the suggestions here, the IRS will spend a tremendous amount of time and money making an assessment against you and they will have a close to impossible time doing anything to punish you for your stand. Please don't use this approach if you are currently on a back-payment plan with the IRS. The IRS will cancel your payment agreement. You must be up to date for past years in order to successfully use this approach. I am not a lawyer, so I suggest that you also consult with an attorney. If you don't have an opinion letter from an attorney, please let me know. I think the best way to handle the situation is to write an informal request for an indefinite extension of time to file the return until the IRS can show you how to file the return without waiving your Fifth Amendment Rights. Attach your attorney opinion letters and opinion letters from other professionals.
Mail the letter in by April 15, 1997. You can then wait for the IRS to start its assessment procedures under Section 6020(b) or you can file an informal claim for a refund of the money that you think was overpaid by your employer. The IRS will ignore the claim so you can then sue them in District Court. The IRS will react by issuing a Statutory Notice of Deficiency and filing a counter claim in District Court. Then you can sit down with the Department of Justice Attorney who will fly out from Washington to talk with you and you can agree that you owe the taxes that were already withheld except for the .00. You should be able to settle for a payment of .00 to you and you will be ready to do it again next year. If only 100,000 people a year used this approach, the IRS would beg Congress to get rid of the income tax. Remember, this is not legal advice, I am just exercising my First Amendment Right to speak on these issues. I hope you have a great April Fools Day this April 15, you should enjoy it more than most.
Sincerely,
Willie

Two Criminal Cases
Recently two criminal cases came to a conclusion. These cases were both from the same city and the defendants worked in the same profession and they knew each other. Their fact situations were remarkably similar. One individual started working with me the moment that he was contacted by the Criminal Investigation Division. The other individual used the traditional approach and went to trial using standard patriot arguments. My guy plead to a misdemeanor and he received a fine and his punishment was to go home to his wife and kids for six months. He was on a leash so he was required to go home every night after work. The other fellow went to trial and lost. He was convicted of a felony and he received a ,000 fine and two years in prison.
The fact that these two cases had very similar fact situations shows that it is possible to get very different conclusions by using different approaches. Therefore, if you are contacted by the CID, you can start from that point forward to cut the damage. Actually, it would be a good idea to start early before you are contacted by the CID; especially if you are a
high-risk case.
So, what is a high risk case, anyway? Individuals who have professional jobs and who have filed exempt W-4 forms are at an extremely high risk if they make more than the average person. The IRS likes easy cases. Criminal Investigators have found that it is very easy to convince juries to convict individuals who make a good wage if they are on exempt W-4 Forms. The IRS can prove income very easily by getting a copy of the W-2, and they have the W-4 Form exempt which they use to convince the jury that the defendant filed a fraudulent form.
If you are a wage-earner and you have followed the dictates of a Patriot Guru who has advised you to file an exempt W-4, I would suggest that you immediately file a revised W-4 and allow withholding. This is especially true if you are a professional with a high paying job. However, in the long run, any individual who works on a W-2 employee situation will have to back down from the exempt claim. Even if the IRS does not proceed criminally, it is likely to proceed civilly. That means the IRS can garnish your wages and leave you about a month to live on. They can do this without a court order simply by assessing a bogus assessment.
The only way that an IRS levy can be removed effectively is for the individual to agree to file returns. The IRS knows that filing returns is voluntary. But in order to enforce the illusion that filing tax returns is required, the IRS forces individuals who owe back taxes into submission by starving them.
Therefore, if you want to effectively challenge the alleged filing requirement, please do not file an exempt or inflated W-4, you will just assure yourself a place in the line of IRS victims. The moral of the story, of course, is that you must understand what you are doing and don't believe what people tell you just because you want to believe it. Learn to develop your "baloney detector" so that you do not become a major casualty in the struggle.