The 'lies' mentioned in that piece seem to be about Schiff's contention that income is defined by tax law only as 'corporate profit or gain'.

"Also on Monday, the U.S. Attorney requested that the judge issue a special instruction to the jury to clarify potential “confusion” that may have arisen during the testimony of government witnesses regarding the liability statutes that allegedly impose income taxes on wages and salaries. Such instructions are usually given only just before the jury begins its deliberations.

Schiff vehemently objected, noting for the record that the terms “wages” and “salaries” had been specifically deleted from the 1954 tax code, that the proposed instruction was contrary to legislative intent as evidenced by both House and Senate committee reports, and that the proposed instruction was a deliberate misstatement of the text of the current statutes. Schiff further asserted that if the judge proceeded with giving a knowingly false jury instruction, that he was guilty of conspiring with the government to deny him a fair trial.

Despite Schiff’s objections, the Court issued the instruction to the jury."
www.givemeliberty.org

However...

"Many believe because of Irwin Schiff that wages, salaries & tips are not income and are not taxable as such. Why? Because Irwin Schiff says so that's why and "he's the Self-Proclaimed leading authority on the income tax" self-proclaimed I mind you. He takes completely out of context what was actually said so it would say what he wanted it to say and mean instead of what it actually really says and means. Now it is a well, known fact that courts give great attention and importance to what the actual intent was of Congress regarding statutes they enacted.

Schiff has always contended that Congress removed the enforcement provisions from the code when they went from the 1939 code to the 1954 code by removing wages, salaries and tips from the list in section 22a "Gross Income Defined" of the 1939 code when they changed it to and became section 61a "Gross Income Defined" of the 1954 code. Irwin Schiff now has proved his own theory on "Gross income Defined" of the 1939 Section 22a vs 1954 Section 61a code wrong.

Schiff is now using a footnote not a part of the actual decision of C.I.R. v. Glenshaw Glass 348 US 426 (1955) and "House Report No. 1337 and Senate Report No.1622" to back his theory that he does not have income in its "Constitutional Sense" because in the Glenshaw Glass case they refer to "House Report No. 1337 and Senate Report No. 1622" in the footnote. His new contention is that what was meant by the intent of Congress in this report is that "income" in its "Constitutional Sense" means only corporate profit even though that is not what they said. Corporate profit is mentioned nowhere in either the "House Report No. 1337 and Senate Report No. 1622 or in the "C.I.R. v. Glenshaw Glass" case.

Now here is why you must verify everything and not take some Self-Proclaimed Guru's word for anything. In the 1939 code they listed wages salaries and tips as items of income. When they changed to the 1954 code they removed these items but added "not limited to" to the statute meaning that gross income was not just limited to the items listed and added "and similar items" to Compensation for services. Now even thou they removed wages, salaries and tips from the listed items that does not mean they are not considered Gross income. Of course Schiff ignores this fact.

Schiff further ignores the implementing regulation 26 CFR Section 1.61-2, which specifically adheres to the intent of Congress regarding Section 61a of the 1954 Code as recorded by "House Report No. 1337 and Senate Report No. 1622":

26 CFR 1.61-2
Section 1.61-2 Compensation for services, including fees, commissions, and similar items.

(a) In general. (1) Wages, salaries, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses (including Christmas bonuses), termination or severance pay, rewards, jury fees, marriage fees and other contributions received by a clergyman for services, pay of persons in the military or naval forces of the United States, retired pay of employees, pensions, and retirement allowances are income to the recipients unless excluded by law.

But here is where Schiff proved his own theory to be incorrect. Schiff as usual only reads what he wants the evidence to say instead of reading what the evidence actually says as he does with all case law and statutes.

Congress stated their intent very clearly in "House Report No. 1337 and Senate Report No. 1622".

Section 61. Gross income defined
This section corresponds to section 22(a) of the 1939 Code. While the language in existing section 22(a) has been simplified, the all-inclusive nature of statutory gross income has not been affected thereby. Section 61 (a) is as broad in scope as section 22(a). Section 61(a) provides that gross income includes "all income from whatever SOURCE derived." This definition is based upon the 16th Amendment and the word "income" is used in its constitutional sense. Therefore, although the section 22(a) phrase "in whatever form paid" has been eliminated, statutory gross income will continue to include income realized in any form....

...This is not complicated. If you argue that "Gross Income" in its "Constitutional Sense" does not include wages, salaries and tips you will be Wrong and you will lose every time as Irwin Schiff has done repeatedly. So it is evidently clear that Irwin Schiff has missed the point and he has many believing and doing the same. irwinschiffbs.blogspot.com

Schiff's problem in this trial seems to be that he wants to tell the court what the law says and, for some reason, the court thinks it knows better. The government's problem seems to be that its witnesses are not very good debaters.

A common problem with tax protestors seems to be that they depend entirely on exquisitely constructed readings of legal texts (although, in this case, Schiff's seems to be just a misreading), not realising that courts tend to use a whole lot of common sense, too.

"Schiff's problem in this trial seems to be that he wants to tell the court what the law says and, for some reason, the court thinks it knows better."
But, other than that...
Besides, he probably makes a decent amount on his book sales.
--------
I wonder if Schiff pays the fines and court costs of the people who have tried his methods to get out of paying income tax.

quote:

Originally posted by DorianGreyed:
I wonder if Schiff pays the fines and court costs of the people who have tried his methods to get out of paying income tax.

Are there many such people?
It's amazing how gullible and how optimistic some people can be. For Schiff has the problem, on his argument, that the US legislature in passing law or the tax authorities in writing rules must have decided to scrap what may be the greatest source of Revenue.

He would also make the whole USA into a significant tax haven. Hey, if he wins can I give up an idea of tax refuge in Monaco ? Nearest we've got so far is that Mrs FP has deliberately had a corporation created in Delaware; the state is very foreigner-friendly in matters of corporate revenue, inter alia. If I've understood correctly Schiff would have her paying no tax on personal income arising in the USA . So where in the US has a climate like Monaco's but with a lot more space?

PS We have had something a little like this. Unlike Schiff's simple case, it was based on some sound and valid authority. There was a case which suggested plainly that a tax scheme based on its facts would work. Sadly it was later correctly held by the Revenue that the case was decided on its own facts,which by happy coincidence meant that no tax was payable. Anyone setting up a copycat arrangement for the sole purpose of avoiding tax would fail. The Revenue declared an amnesty. They gave anyone who had set up such a scheme a year in which to dismantle it, without penalty.

Let's see...Schiff has been cited for Contempt of Court and faces eight daays in jail, with possibility for even more if he ignores the judge's orders, and the government's case is sputtering??? It sounds to me, even from the slanted report that Paul linked to, that the only sputtering heard is/will be Schiff's as he is led away.

This trial is a perfect example of why we need to get away from the income tax & go ta a National Sales Tax. Then we wouldn't be having what we have here.

Th IRS is an organization that should be dismantled. An organization out of control that is totally incompetant.

Amen & Amen

Thank you, Lighteningrodd

quote:

Originally posted by Lighteningrodd:
This trial is a perfect example of why we need to get away from the income tax & go ta a National Sales Tax. Then we wouldn't be having what we have here.

Th IRS is an organization that should be dismantled. An organization out of control that is totally incompetant.

What hope do you have that a body running a scheme for a national sales tax would be any better?

That said, when Value Added Tax, VAT, was introduced in Britain it was put under the Customs and Excise not under the Inland Revenue . Sadly this was not an assertion that the Inland Revenue could not do their job. It was because the Customs have always had strong, automatic and statutory powers to enter premises, search and seize goods and documents and so on, all far beyond the powers of the Revenue. So the powers originally given to them to stop smugglers and drug runners could be used against shopkeepers (Well, against those with a turnover of more than about $120,000 p.a. anyway; less than that and the business cannot be registered to charge VAT nor can it deduct VAT from its own trade purchases)

quote:

Originally posted by FredPuli:

quote:

Originally posted by Lighteningrodd:
This trial is a perfect example of why we need to get away from the income tax & go ta a National Sales Tax. Then we wouldn't be having what we have here.

Th IRS is an organization that should be dismantled. An organization out of control that is totally incompetant.

What hope do you have that a body running a scheme for a national sales tax would be any better?

That said, when Value Added Tax, VAT, was introduced in Britain it was put under the Customs and Excise not under the Inland Revenue . Sadly this was not an assertion that the Inland Revenue could not do their job. It was because the Customs have always had strong, automatic and statutory powers to enter premises, search and seize goods and documents and so on, all far beyond the powers of the Revenue. So the powers originally given to them to stop smugglers and drug runners could be used against shopkeepers (Well, against those with a turnover of more than about $120,000 p.a. anyway; less than that and the business cannot be registered to charge VAT nor can it deduct VAT from its own trade purchases)

I stand behind what I say. Our income tax code is so complicated, even the the idiots at the IRS don't understand them Those SOB's are so damn stupid, they couldn't make it out in the real world. Anyone who has had any dealings with the IRS would feel like I do.

A National Sales Tax would be a whole lot better than the income tax we have right now. Simplifies everything. We already have sales taxes levied by many of our state & local governments. So a National Sales Tax could easily be implemented.


And for a Value Added Tax. Forget it. That only complicates things. We certainly don't need that.

One of the advantages of VAT is that a chain of people are involved in charging and paying for it. It's (relatively) easy for the tax authorities to see that someone didn't collect VAT when they should have.

The sales tax proposed by Boortz would depend on only two people - the buyer and seller of a new item - to be honest. The temptation to forget about the tax, and complete the sale off the books, would be pretty strong. Theoretically, to ensure collection, the tax authorities would have to be able to track every retail purchase made, wouldn't they? Imagine how complex and obtrusive that would be.

On second thought, maybe it's the rate of tax that's important. Sales taxes around the world seem to fall within the range 5-15%, roughly. Maybe that's the rate at which potential cheaters have to do a careful risk/benefit analysis. The Boortz tax would be 23% (They say. To start with. We know how taxes tend to ratchet up - just one of the underlying problems with taxation that the sales tax doesn't address.) Maybe the idea of paying a quarter of the value of what you're buying in tax would tip that risk/benefit analysis in favour of cheating.

I believe that the National Sales Tax idea seems simple enough, but only when looked at simplistically and with a natural tendency to prefer almost anything other than the present income tax. On closer examination there seem to be far too many things wrong with the idea. In the first place in order to generate as much tax revenue as under the present system, it would require that the middle classes pay a higher percentage than at present. The reason that seems inevitable is that the wealthier people spend a smaller fraction of their income on taxable goods than the less affluent. The poorest, who pay no income tax would still be subject to pay a sales tax, as they do now on every cent of income spent for necessities. The likelihood of under the table deals, bartering and swapping, and black market dealing would accompany a national sales tax in the same way as it does for state and local sales taxes, and on a greater scale.

How would a national sales tax impact the churches and other tax exempt institutions? Would they be exempt from paying sales taxes on their purchases? The government is one of the largest, if not the largest, purchaser of goods and services; would they be required to pay sales taxes to themselves? And what goods and services are included and excluded? I think it is one thing to advocate a national sales tax and appeal to our distate for the existing tax code, but the existing one has evolved over many years and been tinkered with and adjustments made from year to year. I think we need to be careful not to throw out the baby with the bathwater - only to end up drinking the bathwater. I personally suspect that those who urge any sweeping change in any huge, high-inertia system, expect to profit disproportionately to the overall population.

quote:

Originally posted by newnickname:
One of the advantages of VAT is that a chain of people are involved in charging and paying for it. It's (relatively) easy for the tax authorities to see that someone didn't collect VAT when they should have.

The sales tax proposed by Boortz would depend on only two people - the buyer and seller of a new item - to be honest. The temptation to forget about the tax, and complete the sale off the books, would be pretty strong. Theoretically, to ensure collection, the tax authorities would have to be able to track every retail purchase made, wouldn't they? Imagine how complex and obtrusive that would be.

Many states already have a sales tax in place so in many ways the infra-structure is already in place.

Neal Boortz discusses the aspect of not properly implementing the sales tax on a sale. There would be some pretty stiff penalties involved on the retailer. The retailer would have a lot more to lose than what he might gain from not implementing the tax on a sale.

quote:

Originally posted by frankvan:
I believe that the National Sales Tax idea seems simple enough, but only when looked at simplistically and with a natural tendency to prefer almost anything other than the present income tax. On closer examination there seem to be far too many things wrong with the idea. In the first place in order to generate as much tax revenue as under the present system, it would require that the middle classes pay a higher percentage than at present. The reason that seems inevitable is that the wealthier people spend a smaller fraction of their income on taxable goods than the less affluent. The poorest, who pay no income tax would still be subject to pay a sales tax, as they do now on every cent of income spent for necessities. The likelihood of under the table deals, bartering and swapping, and black market dealing would accompany a national sales tax in the same way as it does for state and local sales taxes, and on a greater scale.

How would a national sales tax impact the churches and other tax exempt institutions? Would they be exempt from paying sales taxes on their purchases? The government is one of the largest, if not the largest, purchaser of goods and services; would they be required to pay sales taxes to themselves? And what goods and services are included and excluded? I think it is one thing to advocate a national sales tax and appeal to our distate for the existing tax code, but the existing one has evolved over many years and been tinkered with and adjustments made from year to year. I think we need to be careful not to throw out the baby with the bathwater - only to end up drinking the bathwater. I personally suspect that those who urge any sweeping change in any huge, high-inertia system, expect to profit disproportionately to the overall population.

I don't see where the Middle Class would be any worse off than it is right now. I tend to think in many ways it would be better off. As for the poor, I doubt any real change for them either. The interesting thing about the plan Neal Boortz writes about, is the government will send everyone a check once a month to cover food & necessities.

As for churches & other non-exempt institutions, that is an interesting point you bring up. I don't recall Neal Boortz bringing that up in his book.

Personally I would love to throw the IRS out with the bath water.

"The interesting thing about the plan Neal Boortz writes about, is the government will send everyone a check once a month to cover food & necessities."

That's a hell of a lot of checks! And the IRS would have to be replaced by some similar tax collection agency, wouldn't it?? I presume we would still be buying tanks and aircraft carriers etc. in addition to this new expense of the monthly checks for food and necessities. I don't see how adding to the revenue needed wouldn't call for more taxes of whatever kind.

"I don't see where the Middle Class would be any worse off than it is right now. I tend to think in many ways it would be better off."

Well the wealthy people don't have to spend their entire income on purchase of goods whereas the poor do. Consequently the middle class, having less disposable income than the wealthy, would have to make up the shortfall. As a member of the middle class elderly, I now have bigger personal exemptions for myself and my wife, the over sixty-five and blind would have a bigger one than that, how could a sales tax differentiate?? Would you want to benefit by making life more onerous for your parents and grand-parents ??

Could it be that the current American system is unnecessarily complicated ? It sounds that way. Income tax ought to be easy to calculate, even for the self-employed. Anyone who has ever attempted to complete a German tax return knows the true meaning of insanity . Perhaps the American one is modelled on it? On the other hand, the tax return form in Britain is a short document which is exceptionally easy to complete. You don't even have to do the tax calculation. (Strictly speaking the Revenue are only obliged to do that if your return is in by a certain deadline, but the truth is they'll always do it. )

Value Added Tax can only be charged by VAT registered businesses. A business in Britain must be registered if it has a turnover above £60,000 (c $120,00) p.a. Anyone who is VAT registered deducts all the VAT they pay out in the course of their business expenditure. At the end of each quarter the business totals up the VAT it has charged, deducts the VAT it has paid and sends the balance to the tax authority. Naturally it may be that it has paid more VAT to suppliers and on other expenses than it itself has charged to customers. In that case it gets a payment by return from the tax authority.

VAT is simple to operate.The British standard rate of Value Added Tax is 17,5% which is the only rate noticed by the ordinary citizen.There is a lower rate of 5% too. The French standard rate is 19,6%. The standard rates vary across the Union from 15% to 25%, most being around 18%. VAT is applied to services as well as to sale of goods. VAT is not applied to foodstuffs and other basic essentials such as childrens' clothing. So medical doctors do not charge VAT, being exempted, but lawyers have to. (Lawyers are not regarded as essential, I suppose, which just shows how strange some tax laws are ).

VAT on all goods and services is universal thoughout the European Union. Sales taxes other than VAT are not encountered, diesel and petrol being exceptions. Those bear extra tax at a fixed number of pence per litre.

Being a simple system VAT results in less fraud and less confusion than the old system of sales taxes in Britain. The old system was bedevilled with small scale fraud. It does not matter now, for example, whether goods are new or old.There are not multifarious rates for the different categories of goods. All are taxed the same and at the same rate. Since the retailers have been charged VAT on the goods they buy they have every incentive to charge VAT to the customers. If they don't, they won't recoup the VAT they themselves have paid. That fact alone should be enough to ensure compliance. To benefit at all, any retailer would have to have an agreement not to be charged VAT by all its own suppliers. They in turn would have to have to agree the same with all the suppliers of materials to them and so on, right down to the supplier of raw materials.

VAT at 25%? Wow. So at least one country already has a kind of sales tax equal to the Boortz tax, and (presumably) income tax.

quote:

There would be some pretty stiff penalties involved on the retailer.

Oh, well that's OK, then. Almost nobody commits a crime if there's the threat of a 'pretty stiff penalty'.

Boortz' proposal doesn't actually solve any of the real problems, like how much tax is needed and how wisely it's spent. On paper, it may look straightforward but, on paper, so does income tax. The Boortz tax is just as open to dodges, frauds, and government manipulation as the present system. Why go through all the disruption of change, unless there's a clear advantage?

Tax protestors, like the guy in the original post, are even more unrealistic, of course. Everywhere, people choose to have some form of government. Many may not like the particular form they have, but it's better than no government, witness Iraq and Somalia. Adults know that government must be paid for, and that national governments are often the only way to attain some things in life - law and order, national defence, roads, bridges, civilised provision of health care (although I think the penny still has to drop in the US for that last one).

Childish fantasists want to go it alone. They can't - however ardently they dream of holing up in some backwoods stockade, knitting their own food and growing their own electricity. We all need society. Complaining about the unfairness of tax is equally ridiculous - life is unfair. Your income depends on a series of accidents - how lucky you were in your station at birth, your education, what job you landed, whether or not that job is one of the ones arbitrarily chosen as high-status and high-reward, and so on. When the government comes looking for tax, pay up. If you don't like how government spends it or how much they take, vote to correct that; don't go bugging the courts with amateurish accounts of what the law actually says. If you don't like the method of collection, promote a better one (I guess Boortz has at least tried that, and his idea might be no worse than the status quo - but is it really any better?).

If there ever was a Fair Tax, the one in the Neal Boortz would certainly come the closest to it. Nobody would dodge the National Sales Tax. Especially the rich. They certainly have nicer cars & more expensive toys than I do. Imagine the sales taxes they would have to pay when they make their expensive purchases.

We have a tax system so complicated, the IRS don't always get it right. Yet when they make a mistake, who foots the bill??? The taxpayer who might have ask them directly for advice in the first place. They are a bunch of incompetant boobs. The sooner we shut that department down, the better off we as taxpayers are.

"Nobody would dodge the National Sales Tax." -
People often try to avoid sales tax now, and many are successful. Why would they stop if the sale tax were more? Altruism? Fear of the government going back to the IRS? Fear of getting caught?
A national sales tax would simply place more of a burden on those who can least afford to pay it, the poor and the middle class, people who barely make ends meet now, and spend all or almost all of their income just to get by. The wealthy have already seen their tax rate cut in half in the last 60 or so years. The middle class and the working poor haven't.