|(NOTICE: The contents
of this page originally appeared on "frivolousreturnfraud.com"
which no longer exists.)
|This is a facsimile of a letter responding to an adverse decision
on all appeal issues from IRS-Fresno. This was one of the IRS offices
that originally and wrongfully assessed IRC 6702 penalties on a
taxpayer return of tax.
March 29, 2006
ZZZZ Z. ZZZZZ Reference: AP:CO:FRC:MXP
Appeals Team Manager In Re:
Internal Revenue Service Collection
Campus Appeals Office Decision Letter, Mar
5045 E. Butler
Fresno, CA 93727-5136
Dear Mr. ZZZZZ:
I am in receipt of your DECISION LETTER
CONCERNING EQUIVALENT HEARING UNDER SECTION 6320 and/or 6330 of
the Internal Revenue Code dated March 1, 2006 and received this
Decision on March 3, 2006.
At the outset I am disappointed
you did not reach a decision on any of the twelve outstanding issues
expressed in my Form 12153 Request for a Collection Due Process
Hearing. Because a levy was issued from two IRS offices on the same
Social Security benefit for the same wrongfully assessed penalties
for the same tax years, two Form12153’s were timely filed with IRS/Fresno
and IRS/Cincinnati. Of course, you chose not to address this situation
where I was not properly noticed prior to levy due to interference
of documents by Social Security officers at Richmond, CA. (Note:
SS officers refused to forward taxpayer pages of the Notice of Levy
in order to assist IRS in collecting at the lowest default rate
of exempt income category. A clear IRS and Social Security conspiracy
to abuse taxpayer rights. )
Is your decision comprehensive
or, as I read it, with respect to proper notice and opportunity
to a hearing, only based on the document you referred to as “L1058,
Notice of Intent to Levy and Your Right to a Hearing” and your statement
it was sent per IRC 6331(a)? This document is part of the “lack
of proper notification” issue raised in Form 12153. It would have
been a simple matter to just give me the document(s) by regular
mail to my residence at any time after liens were filed and prior
to any levy. I believe it is the intent of Congress a person actually
is “given” documents from the IRS and the IRS can establish the
person has possession of any notices issued. As of this writing,
I still have not been “given” proper notice of any lien or levy.
I believe it is improper to reach a decision on penalty
assessments based on a document only you possess and intentionally,
or neglected, failed to provide such documents or proper notice
of the existence of such a document to a affected taxpayer.
I am also disappointed you reached for a decision, by expressing
a false maxim, that all issues are “frivolous or groundless”. I
believe your decision in this respect is flawed in the worst way.
You failed to provide not one authority for a blanket dismissal
of pertinent issues relating to wrongfully assessed penalties, failure
of the IRS to meet its burden of proof for taxpayer liability, lack
of proper notice for liens and levies, and failure to allow a taxpayer
to meaningfully participate in appeals procedures.
to base all your judgment on my filing of a “zero return” for tax
years at issue. If I were given an opportunity to meaningfully participate
with a face to face appeal hearing, my first request of you would
be to produce any “zero return” filed by me for any tax year. You
would be unable to meet this burden as I filed lawful income tax
returns for all years at issue and not one return meets your definition
of a “zero return.” (Note: tax returns for all years at issue are
unavailable according to IRS records. IRS conveniently “lost” all
returns apparently to conceal the fact all returns were not “zero
returns” as the Appeals officer alleged.)
The second request
I would make of you, had I been given an opportunity to meaningfully
participate in a face to face appeal hearing, would be for you to
establish I was not in full compliance with the filing of tax returns.
I filed all required income tax returns for tax years at issue and
continuously to the current tax year and received rebates for overpayment
for tax years 1993, 1994, and 1995. Neither was I required to file
any other type of return of tax nor did I have a duty to act with
respect to filing a return of tax for any other person. And at issue,
my liability for filing a return of tax as described under Section
6702, which I was not required to file, has yet to be established
in a proceeding as required by Section 6703.
Of course, no
notice and demand is required for a penalty under Section 6702,
as you mistakenly stated in your decision, as it is for Section
6700 or 6701 pursuant to Section 6703. This is because when Congress
implemented Pub. L 97-248, in its infinite wisdom, it included a
penalty for an individual (who has a duty to act) who files what
purports to be a return of tax claiming any deduction, credit, or
other tax benefit by reason of a tax shelter or on behalf of a person
assessed a penalty under Section 6700 or 6701. When a person is
assessed a penalty under Section 6700 or 6701 requests a refund,
refund is denied, files in district court for refund and proof of
liability for penalties under Section 6700 or 6701 and 6702 by the
IRS, the liability of an individual assessed a penalty under Section
6702 would also be at issue due to the fact a return of tax meeting
violations outlined in Section 6702 are dependent on violations
of a person under Section 6700 or 6701 and the fact the return of
tax was signed and filed by such individual. So, the liability for
a violation of Section 6702 depends on the liability of a person
assessed a penalty for a violation of 6700 or 6701. I was not required
to file a return of tax for a tax shelter nor did I have a duty
to act on behalf of any person where such person was assessed a
penalty under 6700 or 6701. Section 6702 was wrongfully assessed
in my case.
And, of course, the individual referred to in
Section 6702 may or may not be the same person assessed a penalty
under Section 6700 or 6701 but must be a person such as a officer
or employee of a corporation or a member or employee of a partnership
or entity, plan, arrangement, or transaction where a significant
purpose of the structure is the avoidance or evasion of Federal
income tax for a direct or indirect potential participant (i.e.
tax shelter) and such individual has a duty to act in respect of
which the violation occurs like filing a return of tax which does
not contain information on which the substantial correctness of
the self-assessment may be judged and this conduct is due to a desire
to delay or impede the administration of Federal income tax laws
on behalf of an employer, or a corporation or a partnership, etc.
A taxpayer can not delay or impede the administration of Federal
income tax laws!
Once a taxpayer signs, under penalty of
perjury, an income tax return the IRS has naught to do but collect
the tax due amount stated on the return. A taxpayer need not make
a self-assessment as IRC requires documents, statements, and even
a return of tax to be filed with the IRS, by other persons [nontaxpayers],
to attest to the income and taxes paid by a taxpayer. A taxpayer
need only to make a statement as to filing status and number of
exemptions claimed to complete an income tax return.
so with an organization that offers for sale interests in a tax
shelter to participant investors. The tax shelter organizer (promoter)
must provide a return of tax to investors that must be substantially
correct as to the investments sold to investors.
when an person acts as an individual with a duty to act with respect
to filing a return of tax on behalf of some other person (corporation,
partnership, entity, trust, estate, etc.) the IRS would have some
administration to perform due to the requirement to keep a list
of investors which includes deductions, credits, or other tax benefits.
So, the individual referred to in Section 6702 is a person
who is not subject to the payment of taxes for the person referred
to in Section 6700 or 6701 and is therefore not a taxpayer as defined
in Section 7701. It also follows, Section 6702 would not be an assessable
penalty on a taxpayer’s income tax return. This is why Congress,
in its infinite wisdom, deemed “deficiency procedures shall not
apply to penalties under 6700, 6701, or 6702” because Congress wanted
to insure these penalties were not to be applied to a taxpayer’s
income tax return but only to a return of tax prepared by an individual
who had a duty to act on behalf of another person whose statement,
return, affidavit, claim, or other document were violations of Section
6700 or 6701. The Congress, in its infinite wisdom, even included
provisions waiving penalties under Section 6694 for tax preparer
penalties if a penalty was assessed under Section 6701 (understatement
It seems the Congress was concerned taxpayer abuse
could occur if the filing of a “frivolous tax return” penalty could
be assessed on a taxpayer’s return of tax. If this was the intent
of Congress, Congress would have said so when 6702 was codified
and subsequently amended. This being said, a “frivolous tax return”
penalty could conceivably be assessed on every tax return filed
by any person to include “taxpayers” without any burden of proof
having to be presented by the IRS as to liability for a violation
of Internal Revenue Code. This situation would also allow the IRS
to quash dissent, freedom of speech, and swing wide the doors of
taxpayer abuse by over zealous IRS collection officers. I do not
believe this situation is within the intent of Congress when it
delegates its authority to administrative agencies. (Note: Actually,
the Congress delegates its authority, with respect to applicable
Public Laws in this case, to the Executive branch to administrate
the provisions of passed legislation. The Executive branch then
delegates its authority to administrate tax laws to the Department
of the Treasury who then delegates tax collection to the Internal
Revenue Service (IRS). The IRS is a low level administrative agency
with the authority to collect tax due not to create a tax not due.)
There are no provisions in the Internal Revenue Code for the
Internal Revenue Service to assess a “frivolous return” penalty
on a taxpayer. However, the Internal Revenue Code does contain a
penalty for taxpayers who present the Court, in a proceeding, a
position which frivolous or groundless. Needless to say, only the
proper Court can assess a taxpayer a penalty for presenting a frivolous
or groundless argument.
Could the Congress have intended
that a taxpayer “exhaust all administrative remedies” before petitioning
the proper Court for relief? Could it be the Congress intended for
taxpayers to resolve any misunderstanding concerning their tax liability
or provisions of the Internal Revenue Code by having the delegated
administrative agency provide all necessary assistance to resolve
tax issues? Could it be the Congress did not want the Tax Court
or other courts impacted with tax issues that should be reviewed
extensively by the designated administrative agency and taken to
a resolution amenable to persons required to file returns of tax,
the Department of Treasury, and the intent of Congress.
respect to the issues at hand, it would be presumptuous of me to
insinuate IRS officers and other Federal officers would intentionally
collaborate to deprive taxpayers of rights under the constitution
and Federal law just because they could.
So, I will presume
this is a situation where IRS officers mistakenly assessed a penalty
and subsequent interest penalties, and, by oversight, withheld refundable
overpayment of taxes, unknowingly did not provide proper notification
to a taxpayer for filing of liens and issuing levies, and inadvertently
denied a taxpayer meaningful participation in a hearing where IRS
could not meet its burden of proof for liability for a violation
of the Internal Revenue Code and thereby eliminated any avenue for
a taxpayer to seek relief for taxpayer abuse in other tribunals.
This situation leaves no alternative but to continue to seek
assistance from a higher level of bureaucracy. In order to do so,
I will submit a Freedom of Information Act request for documents
relied on in this Decision because the IRS has thus far circumvented
delivering or refused to forward documents relevant to this appeal.
I realize this writing is falling on “deaf ears” but I need
to get something in the record so I can move forward in search of
a fair and equitable forum to express my deep concern and dissatisfaction
for how unnecessary, time consuming, and resource depleting, this
exercise has been for all parties. Given this experience, and taking
the liberty to paraphrase the words of a great man, “I can hardly
recommend the [Internal Revenue Service] to anyone.”
cc: National Chief of Appeals
NOTES TO FILE AND REFERENCES
Appeal mailed to IRS/Fresno
Appeals 7/19/2005 for Tax Years 1994 and 1995 within 30 days of
Appeal mailed to IRS/Cincinnati Appeals
8/9/2005 for Tax Years 1991, 1992, 1993, 1994, and 1995 within 30
days of receipt of a facsimile of Form 668-W(c) dated 11/11/2004
from Social Security Admin., Richmond, CA.; no response from Cincinnati.
IRC 6703 (c) (1), (2)
Pub. L 97-248, Title III, Sections 320(a),
322(a), 324(a), 326(a)
IRC 6671(b); IRC 7701 (a)
(b) (2 ), (d), (e); IRC 6112 (a), (b), (c)
IRC 6671 (b)
6703 (a), (b), (c)
IRC 6671 (b)
IRC 6111 (b), (c), (d), (e),
IRC 6111 (c); IRC 6702(a)
IRC 6702 (a)
IRC 6702 (a)
IRC 6673 (b); IRC 7433 (a), (d)
This is a facsimile
of a letter sent to SSA-Richmond. The letter previously received
from SSA-Richmond attempts to sidestep any responsibility for taxpayer/beneficiary
abuse at the hands of SSA officers.
xxx xxxxxx xx
PO Box 2000 xxxxxx, XX xxxxxx
Richmond, CA 94802-1000
Assistant Regional Commissioner
Processing Center Operations
I am in receipt, on June 15,
2006, of your letter dated June 12, 2006 responding to my letter
dated January 23, 2006 regarding accounting errors on Form SSA-1099
2005 Social Security Benefit Statement issued by SSA-Western Program
You state, in your letter, the Social Security
Administration (SSA) merely assists the Internal Revenue Service
(IRS) in levy collection. If you will review my initial letter,
and those that followed, to you and other officers of SSA regarding
this levy action by the IRS, I informed you that when the Social
Security dons the cloak of the IRS by unconditionally accepting
levy documents from the IRS, Social Security now has an obligation
to preserve taxpayer rights as well as SSA beneficiary rights as
outlined in Title 26 and Title 42 .
In order to preserve
taxpayer/ beneficiary rights it is necessary to insure a taxpayer
has actually received levy documents, you possessed since November,
2004, prior to any levy to fulfill proper notification requirements.
SSA had possession of documents for four months prior to confiscating
benefits beginning March, 2005. This was ample time for SSA to send
pages 2-5 of Form 666-W(c) to a taxpayer/ beneficiary initiating
the 30 day period of proper notification of a levy allowing a taxpayer
to return pages 3 and 4 (Statement of Exemptions and Filing Status)
to SSA, within the 30-day period, thereby also allowing a taxpayer
to lawfully claim exemptions to levy. Because SSA refused to allow
a taxpayer to timely claim exemptions to levy, SSA decided which
exemptions SSA would allow thereby depriving a taxpayer a lawful
claim of exemption to levy which constituted taxpayer/ beneficiary
abuse in willing concert with ongoing IRS taxpayer abuse.
It should be noted, the IRS initially assessed a penalty on
a return of tax I was not required to file and did not file. IRS
has yet to meet its burden of proof I was required to file such
a return of tax. Because IRS will not correct its wrongful assessment
and in turn correct its wrong doing, IRS resorted to denial of due
process and nefarious collection schemes in order to collect on
wrongfully assessed penalties. This is not an unusual procedure
for the IRS as a significant number of other taxpayers will attest
to. This is not a delinquent tax issue. This is a taxpayer abuse
issue with the IRS that, hopefully, the Treasury Inspector General
for Tax Administration will resolve.
With regard to official
misconduct, if SSA did not intentionally withhold and then refuse
to send this taxpayer levy documents I would have lawfully been
able to claim a filing status of Married Filing Jointly with two
exemptions on the approved IRS forms. SSA intentionally withheld
pages 2-5 of Form 666-W(c) even in the face of a Freedom of Information
Request for the documents. This SSA misconduct intentionally and
recklessly denied taxpayer/ beneficiary rights and fostered the
ongoing taxpayer abuse conducted by the IRS.
initially, the levy documents could have been returned to the IRS
unanswered and compelled the IRS to take-up the collection directly
with a taxpayer. But, even though Social Security, an independent
agency under the Executive branch of the Federal government, chose
to become a cohort of the IRS, a low level administrative agency
under the Department of Treasury also part of the Executive branch,
to separately and jointly collaborate to continue IRS taxpayer abuse
that, in this case, has spanned more than ten years. All this in
conflict with the Mission Statements of both agencies.
agree with your statement “Social Security has neither the authority
nor obligation to question the correctness of an IRS levy.” However,
I believe Social Security also does not have the authority to circumvent
taxpayer/ beneficiary rights by slipping into bed with nefarious
IRS collection schemes. SSA took on the obligation to honor an IRS
levy, without question, that did not carry any authority to require
the SSA to do anything. In doing so, SSA did not acquire any authority
via the levy document or through authorization by this taxpayer/
beneficiary to confiscate any benefits to satisfy IRS schemes and
foster taxpayer abuse. By SSA intentionally withholding pertinent
taxpayer/beneficiary documents containing information of taxpayer
rights and alternatives to a collection action by the IRS, SSA unlawfully
prevented a taxpayer/ beneficiary the opportunity to exercise lawful
rights and prevent taxpayer/ beneficiary abuse at the hands of unscrupulous
IRS and SSA officers.
Your decision to confiscate my benefits
was performed under color of office and clearly without regard for
taxpayer/ beneficiary rights under federal law. Your actions denied
proper taxpayer notification of a levy, a denial of an SSA appeal
hearing to address your decision to withhold benefits, a refusal
to provide pertinent documents in your possession containing approved
forms that would allow a lawful exemption or alternatives to the
levy, and falsifying federal tax documents to cover wrongdoing.
Your circuitous C.Y.A. arguments will not change the facts of this
issue and your disregard for taxpayer and beneficiary rights. SSA
would not have suffered any harm by forwarding levy documents to
this taxpayer/ beneficiary. By not forwarding such documents, SSA
intentionally inflicted irreparable harm to a taxpayer/ beneficiary.
I believe your, and other SSA/IRS officers, coverup of official
misconduct supports a position neither the SSA nor the IRS will
brook no challenge to its’ wrongdoing. Not surprising, it is clear
all this is falling on deaf ears at this level because it appears
this situation is not unique but routine. It is also clear this
issue needs to be brought to the attention of appropriate upper
echelon of both the SSA and the IRS.
It is interesting that
two administrative agencies under the Executive branch maintain
policies advocating taxpayer and SSA recipient abuse contrary to
the intent of laws passed by Congress and signed by the President.
It, therefore, becomes more than paramount for the Congress to also
be made aware, by any means, of routine official misconduct of administrative
agencies of the Executive branch.
CC: SSA-OIG, Commissioner-SSA
TIGTA, Commissioner - IRS, Oversight
Copyright: Tengoku dojo, 2006.
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