Beware of anti-tax con men

By Leo K. O'Drudy, III
web posted February 26, 2001

Tax time, April 15, is drawing nearer and nearer. Almost everyone is unhappy about having to pay income and payroll taxes, but conservatives are especially vexed.

More than most, we understand that these taxes fuel Big Government, which undermines our prosperity, our liberty, and our values. We know that these taxes did not exist for the majority of American history, and were never intended by our Founding Fathers. Moreover, we have a healthy suspicion of government overall and an insistence that our leaders follow the strict limits set on the federal government by the Constitution.

These characteristics of conservatives are good things, most of the time. Unfortunately, they also make us vulnerable to con men.

I handled a prominent U.S. Senator's correspondence on tax issues for two years. In reading these letters it soon became clear that there are conferences, seminars, and classes set up by confidence men with advice that can ruin you if you take it. But they are popular because like all good cons, they tell people what they want to hear; for example, that the income tax is voluntary or fraudulent and you can legally avoid paying it with a few "secret" steps .... steps you can learn for a fee.

A typical example of the kind of games they play is the tax code's provision that the term "United States" includes the District of Columbia, Puerto Rico, Guam, and the Virgin Islands. It's obvious to anyone with common sense that that provision merely makes sure you understand that for the purposes of this law the phrase "United States" includes the 50 states PLUS those areas.

But these people seize on that quote and claim it means that "United States" means ONLY Puerto Rico, DC, etc., and therefore excludes the 50 states. Therefore, according to them, if you are a resident of Virginia, you are not in the United States and not subject to income tax!

Another thing the con men do is to hype past statements by government officials, including heads of the IRS, that seem to say the income tax is voluntary. A closer look at the speech or paper always reveals, of course, that the speaker or writer was simply referring to the reality that the government doesn't send men with guns door to door and collect tax from every taxpayer on the spot; rather, it relies primarily on people voluntarily sending their owed taxes in without having to be forced to right then and there. But what you'll hear is that the income tax is "voluntary", with a name and date or a court ruling and its impressive looking legal citation brandished as proof that when the IRS tells you you must pay up, it is lying to and robbing from you.

This is a far cry from legitimate tax advice or tax cut/tax reform activism, which is welcome and valuable in our age of sky-high and complex taxes. This is a fraud, ironically disguising itself as an exposer of fraud.

I have read many letters from people, often men with wives and children, who have unnecessarily subjected themselves and their families to years of misery and hardship because they believed the kind of nonsense I have described. Even in the ruins, they cling to those comforting lies. Perhaps it is much more exciting to be a lone persecuted hero against a lying thieving juggernaut than it is to write the check you owe like everyone else.

Sadly, many of those who fall for this are deeply religious conservatives who are understandably receptive to claims of government greed and wrongdoing. God help them. The IRS can be nightmarish enough even if you have done nothing wrong; but if it has a cut-and-dried, open-and-shut case on you of tax evasion or refusal to pay, it will crush you like a rotten grape under a steamroller. Your checking account and savings can be seized; as well as your car and furniture; you can find a lien placed on your income, business, or home; your life will never be the same.

Someone telling you the 16th Amendment was never ratified? You don't owe income tax because we're off the gold standard? Congress can't tax occupations of "common law right"? It's all hooey.

I recommend you write to your Congressman or Senator and ask for a Congressional Research Service report written for Members of Congress about these sorts of questions. It is called Frequently Asked Questions Concerning the Federal Income Tax - Report 97-59A. It answers question after question and rebuts myth after seductive myth, all with facts and clear logic.

Ultimately, however, your best defense is common sense. As always, if something sounds too good to be true, it is. And until the glorious day comes when we eliminate the entire federal tax code and replace it with a low simple national retail sales tax, or nothing at all, you should "pay unto Caesar what is Caesar's." As for the con men and their fly-by-night tax protestor seminars that have helped cause so much confusion and anguish, I hope they are investigated for fraud . . . and audited within an inch of their lives.

Leo O'Drudy is a host of Direct Line, Free Congress' live interactive Renaissance Network television program.

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